FMR LLC and units Fidelity Global Brokerage Group Inc. and Fidelity Brokerage Services LLC are facing a lawsuit after Fidelity's Active Trader Pro platform suffered from technical issues that allegedly prevented traders from placing their orders amid stock market volatility.
Christopher Musso filed the lawsuit Feb. 14 in the United States District Court for the District of New Jersey, accusing the companies of gross negligence, negligent misrepresentation and violations of New Jersey law and similar state laws. The lawsuit is seeking class-action status.
The lawsuit claims that traders could not execute trades on Fidelity's Active Trader Pro platform at the market open on Feb. 6, shortly after volatility broke out. It was important that clients have access to the platform to monitor their respective investments and be able to execute fast and quick trades at that time, according to court documents. The lawsuit said the platform's outages and service interruptions due to materially defective technology caused damage to traders.
"Defendants' wrongful conduct left plaintiff and members of the class flying blind, as they were unable to know whether their transactions were executed or the real-time status of their investments," according to the lawsuit.
A Fidelity spokesperson did not immediately respond to S&P Global Market Intelligence's request for comment outside business hours.