Posted by: Aaron Pressman on March 5, 2008
Fidelity Investments has suffered three years of embarrassing revelations of bachelor parties gone wrong (the dwarf denied being tossed, if you recall) and free Super Bowl tickets in a federal investigation of gift giving by Wall Street brokers eager for the fund giant’s stock commissions. The firm has already thrown out some of the employees involved and paid back $42 million to its fund shareholders. Today should mark the final chapter as Fidelity settled with the SEC, agreeing to pay another $8 million while sticking to the usual neither admit nor deny wrongdoing formulation common in these type of matters.
If that were it, the firm might be glad to see this final press release on the matter out of the SEC. But instead comes a new and unsettling allegation. Turns out Peter Lynch, while he was running the Magellan Fund and later when he was a fund trustee, was asking his traders to get him tickets from Wall Street, a clear violation of Fidelity’s own ethics policy. Lynch got tickets to everything from the Ryder Cup golf tournament (14 three-day passes!) to sold-out concerts by U2 and Santana. It’s depressing that the face of the firm and one of the all-time great fund managers would have been blind to the ethical — and shareholder damaging — implications of his actions.
Lynch agreed to pay back almost $16,000 but again, admitted nothing.