SEC regulators are considering a fraud charge against Fidelity Investments that would assume that the firm's defrauding, in reference to the company's stock trader gift scandal, was unintentional, according to a Boston Globe report.
An official, who reportedly has firsthand knowledge of the investigation, said the SEC is focusing on a potential violation of federal law that says that it is unlawful for an investment advisor to "engage in any transaction, practice, or course of business which operates as fraud or deceit upon any client or prospective client."
According to Fidelity spokeswoman Anne Crowley, Fidelity intends to argue "why it believes an action should not be brought." She also said that, should the company be charged, Fidelity will "vigorously" defend itself.
"We by no means minimize the seriousness of these lapses. We are committed to taking appropriate steps to prevent their recurrence. Based on our own reviews to date," Crowley continued, "we don't believe that the evidence establishes that our mutual fund shareholders and institutional clients sustained financial loss.
"'We are continuing our reviews and analyses, and if, in the future, we were to conclude that there had been a financial loss to investors, we would step up and make our investors whole."
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.