Federal Judge Dismisses Antitrust Lawsuit Against Fidelity and Schwab

A federal judge in Illinois has dismissed a high-profile lawsuit that accused prominent investment advisory firms, including Fidelity and Charles Schwab, of conspiring to stifle industry competition and inflate consumer costs. The ruling, issued by U.S. District Judge LaShonda Hunt on Monday, found that the plaintiff’s claims lacked the necessary factual basis to support allegations of illegal collusion in violation of U.S. antitrust laws.

According to Reuters, Judge Hunt’s 36-page order criticized the lawsuit for being “heavy on theories and labels and light on details,” describing it as “lengthy, repetitive, and convoluted.” The judge determined that the investment advisor behind the lawsuit, Stephen Greco, did not provide sufficient evidence to substantiate his claims.

Greco, who is the CEO of Spotlight Asset Group and a former national director of wealth management at Creative Planning, had filed the lawsuit in 2022. His complaint alleged various federal law violations, including antitrust breaches, fraud, interference with business contracts, and false advertising. In the lawsuit, Greco claimed that Fidelity, Schwab, and other defendants were engaged in anti-competitive practices designed to undermine Spotlight and hinder market competition.

In separate statements, Fidelity and Schwab welcomed the judge’s decision, with Schwab noting that despite the extensive length of the complaint, it “still failed to lay out a plausible case.” Creative Planning, another defendant in the case, did not immediately respond to requests for comment.

Greco’s legal team, which includes Daniel Petrocelli of O’Melveny & Myers for TD Ameritrade and Charles Schwab, Boris Bershteyn of Skadden, Arps, Slate, Meagher & Flom for Fidelity, and Andrew Schapiro of Quinn Emanuel Urquhart & Sullivan for Creative Planning, did not provide immediate responses to inquiries.

The court has given the plaintiffs until October 4 to file a proposed amended lawsuit if they wish to pursue the case further. The case, titled Greco et al v FMR LLC et al, is being heard in the U.S. District Court for the Northern District of Illinois under case number 1:22-cv-02661.

Source: Reuters