Headlines this morning indicate that the investigation into directed-brokerage trading practices at vaunted Fidelity Investments has moved to the Federal level.  The Department of Justice and the U.S. Attorney General Office are now looking into the nature of gifts bartered from brokerage firms to Fidelity's main trading desk.

The news comes after 20 months of headlines on the mutual fund trading and sales abuse scandal.  While the probe has widened far beyond the office of New York Attorney General Eliot Spitzer, who began this investigation on Sept. 3, 2003, only a handful of the industry's largest firms have remained largely unscathed to date.

Until recently, Fidelity, which has long reigned as the nation's No. 1 retail investment management company, was one of those firms. Only a few individuals at Fidelity have been named in the probe into gifts exchanged for blocks of trades.

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