BOSTON - A U.S. District Court judge has expressed skepticism about a shareholder's claim that Fidelity Investments of Boston had biased its mutual funds' independent directors and charged funds excessive fees.

Judge Patti Saris said that the case that Fidelity shareholder Richard Krantz has filed might be fatally flawed because Krantz's attorney failed to identify the amount of allegedly excessive fees that Fidelity earned in running two funds. Saris also expressed doubts about the merits of Krantz's claims that the Fidelity directors lost their independence because they serve on the board of directors for more than 200 Fidelity funds. The fact that the directors serve on multiple boards does not mean that they are controlled by Fidelity, Saris said.

Saris made her comments at a one-hour hearing in U.S. District Court here on Feb. 14. Fidelity, which denies the allegations, has asked Saris to dismiss the case. It was unclear when Saris will rule on Fidelity's request.

Krantz filed suit against Fidelity in September 1998, attacking the system, common in the fund industry, by which fund board members serve on multiple boards within the same mutual fund complex. Krantz's attorney, Joel Feffer of Wechsler Harwood Halebian & Feffer LLP of New York, said the directors - because they serve on so many fund boards in the same fund complex - must not be effectively overseeing the fees Fidelity charges. Because of factors such as soft dollar payments that Fidelity receives from broker/dealers, there is no way of determining the true fees Fidelity funds are paying, Feffer said.

"You're essentially guessing at this point" that the fees are excessive, Saris said.

Fidelity's lawyer, James Dittmar of Hutchins Wheeler & Dittmar of Boston, said a presumption that the boards failed to adequately monitor fees without evidence of the allegedly excessive fees is not sufficient to allow the case to go forward.

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