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Record-keeping fee charge against Franklin dropped; other parts of suit to continue

A federal judge in San Francisco delivered a mixed ruling in preliminary judgments on a lawsuit filed against Franklin Resources Inc. by former participants in the company's $1.4 billion 401(k) plan.

In an order issued Nov. 16, Judge Claudia Wilken in the District Court for the Northern District of California, granted Franklin's request for summary judgment on the claim that the firm failed to monitor the plan's administrative arrangements, which allegedly led to excessive record-keeping fees.

Ms. Wilken also granted the firm's motion for partial summary adjudication on a claim that the plan's administrative committee was remiss in its oversight of the plan's record-keeping efforts and reasonableness of fees.

The lawsuit combines the complaints of Nelly Fernandez, filed in 2017, and Marlon Cyrer, filed in 2016. It was lodged against Franklin Resources, its board and 401(k) plan committee members.

But Ms. Wilken allowed claims over fee arrangements, self-dealing transactions against Franklin, investment option selection, and prohibited transactions, among others, to advance.