(Reuters) – A federal judge on Monday rejected Vanguard Group’s $40 million settlement with investors who claimed it stuck them with inflated tax bills in its popular target-date mutual funds.

U.S. District Judge John Murphy in Philadelphia said the proposed class action settlement announced in November “provides no value” to investors because Vanguard could have offset the $40 million from its similar, larger settlement in January with the U.S. Securities and Exchange Commission.

Murphy said rejecting the $40 million settlement would also save $13 million in legal fees for lawyers representing the fund investors, and that they “cannot deny the math.”

(Reporting by Jonathan Stempel in New York; Editing by Chris Reese)