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Fidelity Dogged Again By 401(k) Quid-Pro-Quo Allegations
FYI: Fidelity Investments has again been accused of engaging in a quid-pro-quo type relationship with a 401(k) plan sponsor, which allegedly cost employee retirement savers millions of dollars in return for bigger profits.
MIT To Settle Suit Alleging It Hurt Workers In 401(k) Plan
The Massachusetts Institute of Technology has reached an agreement in principle to settle a lawsuit that alleged that MIT, one of the nation's most prestigious universities, hurt workers in its retirement plan by engaging in an improper relationship with the financial firm Fidelity Investments.
Just days ahead of the start of the trial, MIT and the plaintiffs said in a court filing that they had reached the deal and are asking the court for 45 days in order for the details to be finalized and prepared for consideration by the court. MIT Accused Of Costing Workers Millions In Cozy Deal With Financial Giant Fidelity
The lawsuit alleged that MIT went against the advice of its own consultants and allowed Fidelity to pack the university's retirement plan with high-fee investment funds that ended up costing employees tens of millions of dollars. In return, the lawsuit said, MIT leveraged millions of dollars in donations from Fidelity.
MIT and Fidelity have said the allegations have no merit.
The lawsuit said Fidelity executives took MIT officials on lavish outings, including an NBA Finals game. Court documents show that in 2015, when the university considered other options, an MIT dean emailed the head of an MIT committee overseeing the plan: "If we're not switching to Vanguard or TIAA Cref, I am going to expect something big and good coming to MIT," according to the court records.
Jerry Schlichter, the attorney for the plaintiffs, said that soon afterwards, "Fidelity donated $5 million to MIT."
In a court filing, MIT said the dean who wrote that email "never had any fiduciary responsibility for the plan."
In a letter to faculty and staff Thursday, MIT Provost Martin Schmidt wrote: "Although MIT believes firmly that it has managed the 401(k) Plan in careful compliance with the law and in the best interests of its participants, the continued cost and distraction of litigation are likely to be significant. In order to avoid that continued drain of MIT resources, we have reached an agreement to settle the dispute."
The preceding is an excerpt from the complete NPR article.
Check out the MIT/ Jeffrey Epstein scandal for another example of how one of our beacons-of-intellectual-hope turns out to be crass beyond comprehension. Heads have rolled, as they also have at Michigan State University, although no one has ever compared MIT to the East Lansing cesspool.
An MIT dean emailed the head of an MIT committee overseeing the plan: "If we're not switching to Vanguard or TIAA Cref, I am going to expect something big and good coming to MIT"
Jerry Schlichter, the attorney for the plaintiffs, said that soon afterwards, "Fidelity donated $5 million to MIT."
In a court filing, MIT said the dean who wrote that email "never had any fiduciary responsibility for the plan."
As if that makes any difference. The dean may "never had any fiduciary responsibility for the plan", but he/she certainly knew what was coming down, so the situation was obviously not a secret in certain MIT circles.
Shouting "yellow journalism" and "fake news" is nothing more than an attempt to remove a valuable source of information from the citizens of a country, by creating distrust of the mainstream media. A tactic as old as fascism itself.
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MIT To Settle Suit Alleging It Hurt Workers In 401(k) Plan The preceding is an excerpt from the complete NPR article.
See what comes out in 45 days.
Shouting "yellow journalism" and "fake news" is nothing more than an attempt to remove a valuable source of information from the citizens of a country, by creating distrust of the mainstream media. A tactic as old as fascism itself.