Fidelity Independent Trustees Investigating Gifts

Robert Gates, the new U.S. defense secretary, was chairman of a group of independent trustees at Fidelity Investments investigating $2 million worth of gifts from Jefferies & Co. between 2002 and 2004, the International Herald Tribune reports.

But when the Senate confirms Gates on Wednesday, as it is expected to do, he will step down from that position.

Meanwhile, following Jefferies’ $9.7 million settlement with the Securities and Exchange Commission and the NASD this week, regulators are continuing to look into whether accepting the gifts caused Fidelity investors any harm, and if so, the firm could face penalties.

Although Fidelity disciplined two dozen employees, the company has said there is no proof that investors were financially harmed. And while the trading commissions that Fidelity paid to Jefferies went from $4 million in 2001 to $30 million in 2003, Fidelity has said there were legitimate reasons outside of the gifts for Fidelity to give Jefferies that business.