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Case ID: 3662 | Stocks | 09/07/2004
A class action has been filed against Fidelity Management & Research Company and FMR Company, Inc., on behalf of all shareholders in the Fidelity Contrafund, the Fidelity Growth & Income Fund, the Fidelity Magellan Fund, the Fidelity Blue Chip Growth Fund, and the Fidelity Low-Priced Stock Fund, who allege that the companies have charged them excessive fees for the management of the funds, in violation of federal securities laws. The action seeks unspecified compensatory damages.
The action alleges that Fidelity makes excessive profits through "egregious price-gouging" by charging ordinary customers one price but giving huge discounts to big institutional investors for the same services. The lawsuit alleges that the operational savings a fund company accrues when its issues reach the multibillion-dollar level never get passed on to individual investors. Institutional investors bargain for a better deal when they deposit millions or billions with a money management firm, but fund trustees allegedly fail to negotiate a better pricing structure for individual investors as the funds grow. The suit alleges that if a pension fund can pay Fidelity 0.2% to manage $500 million, it makes no sense for Fidelity Magellan trustees to let shareholders pay 3.5 times that much to run a fund that is 125 times bigger. If the pension fund is paying 0.15% for management, the mutual fund should be paying that base amount, too; the fund's overall costs might be higher -- reflecting the charges involved in serving the masses -- but individual investors would not pay more than the big guys for the stock-picking part of the equation. Under federal laws that regulate mutual funds, the fees being charged have to be fair and reasonable-- the action alleges that one way to measure reasonableness is to look at what the money managers are charging in another context for supplying similar or identical services. Fidelity Investments managed over $1 trillion in assets as of June 30, 2004 . At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Stocks Cases of Interest A class action has been filed against chemical and polymer company Crompton Corporation (NYSE: CK) and certain of its officers and directors by stockholders who purchased the company's common stock (or the common stock of its predecessor, Crompton & Knowles Corporation) between October 26, 1998, and October 8, 2002. A lawsuit has been filed in the United States District Court for the Eastern District of Michigan, on behalf of persons who purchased or otherwise acquired publicly traded securities of Visteon Corp. ("Visteon" or the "Company") (NYS: VC.N) between January 23, 2004 and January 31, 2005, inclusive, (the "Class Period"). The lawsuit was filed against Visteon, Peter Pestillo, Michael Johnston, Glenda J. Minor, Daniel R. Coulson and James Palmer ("Defendants"). On April 21, 2008, several motions to appoint lead plaintiffs, lead counsels and to consolidate cases were filed by different groups and individuals. As a result, an order granting different motions to consolidate cases was entered on May 23, 2008.
Several class actions have been filed against jewelry manufacturer and seller Topaz Group, Inc. (Amex: TPZ) and certain of its officers and directors by stockholders who purchased the company's common stock between March 21, 2002, and August 20, 2003. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The parties have agreed on a settlement in several class actions that had been filed against Vaso Active Pharmaceuticals, Inc. (OTCBB:VAPH; formerly Nasdaq:VAPH) and certain of its officers and directors by stockholders who purchased the company's common stock between December 11, 2003, and March 31, 2004. The actions claimed that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. A class action has been filed against HydroFlo, Inc. (HYRF), certain of its officers and directors by stockholders who purchased the company's common stock between July 18, 2005 and October 26, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. |
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