A federal judge in Illinois has dismissed a high-profile lawsuit that accused big-name investment advisory firms including Fidelity and Charles Schwab of conspiring to stifle competition in the industry and drive up consumer costs. The ruling, handed down Monday by U.S. District Judge LaShonda Hunt, said the plaintiff’s claims lack the necessary factual basis to support allegations of illegal collusion in violation of U.S. antitrust law.

According to Reuters, Judge Hunt criticized the lawsuit in his 36-page ruling for being “full of theories and labels and poor in detail.” He described it as “lengthy, repetitive and convoluted.” The judge concluded that the investment adviser behind the lawsuit, Stephen Greco, had not provided enough evidence to support his claims.

Greco, CEO of Spotlight Asset Group and former national director of asset management at Creative Planning, filed the lawsuit in 2022. His complaint alleged violations of various federal laws, including antitrust violations, fraud, interference with business contracts and false advertising. In the lawsuit, Greco alleged that Fidelity, Schwab and other defendants engaged in anticompetitive practices aimed at undermining Spotlight and hindering market competition.

In separate statements, Fidelity and Schwab welcomed the judge’s decision. Schwab noted that despite its length, the lawsuit “still fails to present 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 immediately respond to requests for comment.

The court has given the plaintiffs until October 4 to file an amended complaint if they wish to continue the case. The case, titled Greco et al v. FMR LLC et alis being tried in the United States District Court for the Northern District of Illinois under case number 1:22-cv-02661.

Source: Reuters