Abigail Johnson, chairman and chief executive of Fidelity Investments, will not have to testify at an upcoming trial regarding the Massachusetts Institute of Technology 401(k) plan, marking a stark de-escalation of
tensions that had flared in recent weeks amid allegations the executive was engaged in a
quid pro quo arrangement with the university's retirement plan.
Plaintiffs had sought Ms. Johnson's testimony in a trial scheduled for Sep. 15 in a suit that alleges the university retained
Fidelity's 401(k) services with the expectation that, in return, Ms. Johnson and Fidelity would make a large donation to the university.
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Plaintiffs, represented by
attorney Jerome Schlichter, claim the school breached its fiduciary duties by retaining costly record-keeping and investment management services from Fidelity. They allege the partnership between MIT and Fidelity resulted in the university securing more than $23 million in donations from Fidelity since it became record keeper.
Fidelity fired back, saying in a late-August court filing that the effort to have Ms. Johnson testify amounted to a "transparent attempt to harass Ms. Johnson and to attract media attention." Mr. Schlichter subsequently called that assertion "illogical."
Neither Fidelity nor Ms. Johnson are defendants in the lawsuit, Tracey et al v. Massachusetts Institute of Technology. Ms. Johnson is a member of MIT's board of trustees,
However, plaintiffs removed Ms. Johnson from their witness list after "extensive negotiations," according to a filing Thursday in Massachusetts district court. The parties agreed, in return, to "stipulate to certain facts that may be presented to the court during trial."
This agreement means defendants can't object to certain evidence that the plaintiffs introduce during the trial, said Roger Levy, who has served as an expert witness in past retirement-plan litigation, including cases against American Century Investments and Anthem Inc.
Such evidence could include testimony Ms. Johnson would have provided at trial anyway. Ms. Johnson may have preferred not to testify in order to avoid cross-examination, Mr. Levy speculated.
"We will use the stipulation to demonstrate the facts we allege, and we don't need her testimony to do that now," Mr. Schlichter said, referring to Ms. Johnson.
James Carroll, an attorney representing Fidelity and Ms. Johnson, didn't respond to a request for comment by press time.
