Nearly seven years after their lawsuit was filed, the plaintiffsin a “self-dealing” case against Citigroup will be allowed to moveahead with their claims.

On Sept. 30, U.S. District Judge Sidney Stein denied Citigroup’smotion for summary judgment, which would have thrown the case outof court based on Citigroup’s assertion that the statute oflimitations had passed.

The suit, brought by former Citigroup employees Marya Leber andSara Kennedy, is one of a number of excessive-fee casesfiled in recent years.

It alleges that Citigroup breached its fiduciary duty by includingits own fund options, and those of its affiliates, in the company’s401(k) plan despite having higher fees than competing funds ofequal performance.

Specifically, the plaintiffs allege that Citigroup’s funds“charged higher fees than those charged by comparable Vanguard funds— in some instances fees that were more than 200percent higher than those of comparable funds.”

Court documents show that in 2003 Citigroup’s investmentcommittee eliminated 10 unaffiliated funds and added the new funds,including three of Citigroup’s own options. Participant assets werethen automatically transferred to the new or remaining funds, fourof which were Citigroup’s own or Citigroup-affiliated.

Citigroup’s motion to dismiss the case was rooted in the claimthat the plaintiffs were aware of both the affiliated status of thefunds in question and their fees more than three years prior to thesuit’s filing.

Under the Employee Retirement Income Security Act, if plaintiffshave “actual knowledge of the breach,” then they must bring theirclaim to court within three years of acquiring thatknowledge.

Stein wrote that the plaintiffs did not have “actual knowledge,”as Citigroup claimed, because Citigroup failed to prove that theplaintiffs were given data on the fees of comparablefunds.

In denying the motion, Stein said Citigroup had “not evenattempted to offer evidence that plaintiffs possessed the fee datafor comparable alternative funds.”

“Citigroup employees could have earned millions more for theirretirement if Citigroup had followed the law,” alleged Greg Porter,one of the attorneys for the plaintiffs.

The plaintiffs are expected to ask the court to certify theirsas a class-action claim.