Amid a federal investigation into gift-giving, Fidelity Investments announced a new team of managers this week to help run its stock trading desk, the Boston Globe reports.
The five new managers will work under and report to Scott DeSano, Fidelity's head of global equity trading and one of 14 employees fined and disciplined last December for violating the company's gifts and gratuities policies.
The Securities and Exchange Commission has been investigating Fidelity to determine if some of its traders steered business to brokers who lavished them with such gifts as tickets for sporting events and expensive wines, instead of directing trades to brokers who offered the best prices.
The appointment of the new team is an important step in further strengthening the stock trading unit at Fidelity, which accounts for 5% of the daily trading volume on the nation's two major stock exchanges. DeSano, who has been overseeing this division, is considered an intense and temperamental figure, and the role he will play, in light of the investigations and the fact that Fidelity accounts for 5% of daily trading volume on NYSE and Nasdaq, is being closely watched on Wall Street.
"Scott oversaw the whole division. He continues to oversee the whole division. His job has not changed. He continues to be responsible for setting the strategic direction" of the trading division, said Fidelity spokeswoman Ann Crowley. "We're adding additional operational expertise to assist him in his overall management of the group," she said adding that the new managers are expected to "improve existing efficiencies and enhance existing safeguards."
However, New York Law School professor of mutual fund regulation Jeffrey Haas said he believes the new management team is in response to the gift probe and is the "politically correct response that allowed Fidelity to correct problems while allowing [DeSano] to keep his job and his dignity. Does it smell a little? Yeah, it does."
So far, Fidelity has filled four of the five new management positions, tapping executives from within the firm: Christopher Goudie, head of domestic equity trading; Robert Minicus, head of international trading; David Lane, director of trading operations; and Ani Chitaley, senior vice president and member of a best execution team.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.