Fidelity Investments, the world's largest mutual fund company, confirmed Wednesday that federal regulators are investigating whether its traders took improper gifts in exchange for directing business to brokers at outside companies.
The Boston fund giant, which oversees about $1 trillion for clients, is cooperating with probes by the Securities and Exchange Commission and NASD, said Fidelity spokeswoman Anne Crowley. Fidelity also is doing its own review, she said.
Regulators are examining evidence that brokers may have given Fidelity employees trips to the Super Bowl and Wimbledon, golf outings, and expensive wine in an effort to win trading commissions. Fidelity's ethics rules prohibit employees from taking gifts worth more than $100 from vendors, according to a document filed with the SEC.
The SEC and NASD, formerly known as the National Association of Securities Dealers, an industry self-regulating group, began seeking information from Fidelity and about two dozen other companies after a Boston broker for Jefferies Group Inc. was fired in connection with improper travel and entertainment costs.
Fidelity was the sole client of Kevin Quinn, 38, whom New York-based Jefferies dismissed Oct. 11. Jefferies reviewed Mr. Quinn's expense reports and found that he violated its policy "concerning personal utilization of company property and funds,'' according to records compiled by NASD.
