Lack of broker Fidelity leads to $8m payout to us regulator

Risk staff
01 Apr 2008

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Regulation

WASHINGTON, DC - A US Securities and Exchange Commission (SEC) investigation into bribery and corruption at Fidelity Investments, the world's largest mutual fund investment firm, has ended with it agreeing to pay out $8 million (£4 million) to the US regulator.

Fidelity has admitted that brokers - including Peter Lynch who launched the firm's successful Magellan fund - were involved in arranging gifts to 13 high-profile clients and perks for themselves, including tickets to watch U2, the Superbowl, the Ryder Cup and Wimbledon. The most extravagant gift involved a $160,000 stag party staged for former trader Thomas Bruderman, which reportedly included an appearance by Madonna, female escorts, ecstasy pills and a dwarf entertainer (hired as waiter) who allowed himself to be tossed into the air by guests. The bizarre revelations are in stark contrast to Fidelity's official limit of $100 gifts.

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