A lawsuit by the Securities and Exchange Commission alleges that more than 30 firms spent in excess of $3 million over the course of three years to lure the business of Boston mutual fund giant Fidelity Investments.
The SEC is suing 10 current and former Fidelity employees for violating the conflict of interest rules by accepting lavish gifts that could influence their business methods.
There seems to be a historic tradition of broker/dealer firms engaging in these types of an old-boy system of compensation that loses sight of who the ultimate client is, Jeffrey Haas, a New York Law School professor who teaches mutual fund regulation, told the Boston Globe.
The government documents list hundreds of gifts the traders received, including a $17,533 trip to the Bahamas for former top trader Thomas Bruderman, paid for by the former trading units of Lazard and Credit Suisse in September 2002.
Other items listed include a $1,200 case of wine and $2,200 worth of seats to a 2003 playoff game between the Boston Celtics and the Indiana Pacers.
Representatives from Fidelity declined to comment in detail to the Globe about the gifts.
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.