Thursday, December 21, 2006

"Fidelity to Pay Funds $42 Million After Gifts Review (Update2)" -- Bloomberg

Say What?? Chartered flights, expensive wines, golf clubs, tickets to Wimbledon and the Super Bowl? Pre-game parties put together by Maxim and Playboy?

The $100 annual limitation on the value of gifts -- exceeded when Fidelity's employees took items such as those above from the brokers who had benefited from trading commissions on Fidelity Funds' trades -- is there for a very serious purpose. It is to prevent a "tit-for-tat, you scratch my back, I'll scratch yours" cozy situation from getting out of control, to the detriment of the funds' investors. And was this a gray area? Did it require geniuses to figure out that this was not allowable? Did anyone at Fidelity object at the time? Say "no thank you, I cannot do that"?

Bloomberg.com: Worldwide

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