By Nate Raymond
BOSTON (Reuters) -A subsidiary of Fidelity Investments has filed a lawsuit accusing technology company Broadcom of threatening to cut off its access to key software that has become central to the financial firm’s systems, creating the risk of “massive outages” and trading disruptions unless a judge intervenes to stop it.
Fidelity Technology Group, a subsidiary of the Boston-based asset manager, in court filings made public on Friday in Suffolk County Superior Court alleged its business faces “enormous” harm if Broadcom is allowed to terminate its access to the “business-critical” software after January 21.
Fidelity said it has used “virtualization” software sold by VMware to create, host and manage virtual servers on its physical servers since 2005. That software over time became central to Fidelity’s operations, the lawsuit said.
In 2023, Broadcom completed an acquisition of VMware and revamped its product lineup by repackaging its virtualization products into “expensive” bundles of products, Fidelity said.
Fidelity said that when it sought to renew its subscription to the software, Broadcom declined to honor its right to do so pursuant to its contract with VMware and insisted it buy a bundle instead.
Fidelity, which has around 50 million customers and $17.5 trillion in assets under management, said without access to that software, outages will result across its platforms, customers will be unable to access their accounts or execute trades, and its employees will lose access to key internal systems.
“These disruptions would cause immense harm to Fidelity, its customers, and the financial markets more broadly,” Fidelity said in a redacted copy of its November 3 complaint made public on Friday, which accused Broadcom of breach of contract.
Fidelity and Broadcom declined to comment on Monday.
Broadcom had originally told Fidelity it would lose access to the software after December 22. Fidelity argued it would be “technologically impossible” to migrate away from the software by that date, saying it needed at least 18 to 24 months to do so.
On Friday, Broadcom in a court filing agreed to extend Fidelity’s access to the software through January 21 to allow time for a judge to hear the case.
(Reporting by Nate Raymond in Boston, editing by Deepa Babington)
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