The investigation into inappropriate gifts from brokers to Fidelity Investments traders, potentially influencing their directed-brokerage decisions, has reached the upper echelons of the Boston fund giant, The Wall Street Journal reported Monday.Investigators at the Securities and Exchange Commission are now joining ongoing grand jury and Justice Department probes into gifts from unnamed brokerage firms, people familiar with the situation have told the Journal.

Under the spotlight now, are Fidelity Chairman and CEO Edward C. Johnson III and his wife for reportedly accepting tickets to a figure-skating competition at the 2002 Olympic Games in Salt Lake City. Top-shelf tickets to such games can run as high as $400 apiece. In addition, the Johnsons' daughter and Fidelity heir apparent, Abigail Johnson, is said to have "asked traders . . . to get tickets from brokers who do business with Fidelity," according to the WSJ.

Johnson and her father declined comment for WSJ through spokeswoman Anne Crowley, citing the ongoing regulatory inquiry.

If the SEC finds the firm didn't apply best-execution rules in directing its influential, and lucrative blocks of brokerage trades, the Commission could bring civil-fraud charges against people working at the firm -- or potentially even the firm itself.

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.

 

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