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Fidelity Investments

Headquartered in Boston, Massachusetts, Fidelity Investments is a global services corporation and one of the largest asset managers in the world. Formerly known as Fidelity Management & Research (FMR), it is now more commonly called Fidelity.

As of June 2020, Fidelity had $4.9 trillion in assets under management and a combined total customer asset value number of $8.3 trillion. Its revenue for 2019 was $20.9 billion. There were over 41,000 Fidelity employees in 2021.

Fidelity Brokerage Services has a main office in Smithfield, Rhode Island. In addition to running a broker-dealer, Fidelity oversees many mutual funds and provides services related to:

  • Wealth management
  • Investment funds
  • Fund distribution
  • Retirement
  • Index funds
  • Cryptocurrency
  • Life insurance, and much more

Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) represent investors who have suffered losses because a Fidelity Investments financial advisor engaged in misconduct or was negligent. Our securities attorneys have been fighting for retail investors, high-net-worth individual investors, and institutional investors for over 30 years. Contact SSEK Law Firm today.

Examples of Regulatory Cases Involving Fidelity Investments January 2022: Fidelity Brokerage Services Accused of “Rubber-Stamping” Options Trading Applications

The Massachusetts Securities Division filed an administrative complaint accusing Fidelity Brokerage Services of “rubber-stamping” options trading applications. The firm was also accused of allowing applicants to participate in options and margin trading without first vetting them for suitability.

Secretary of the Commonwealth of Massachusetts William Galvin also sent a letter to Fidelity and several other broker-dealers as part of a sweep looking into target-date mutual funds. The investigation began after Galvin’s office realized that smaller retail investors in certain funds might be subject to significant tax liabilities.

September 2020: National Financial Services Settles SEC Charges

Fidelity subsidiary National Financial Services settled US Securities and Exchange Commission (SEC) charges accusing the firm of selling more than $70 million FuelCell Stock shares without providing a final prospectus. NFS, which earned hundreds of thousands of dollars in commissions from the sales, will pay over $2.4M to resolve the regulator’s case.

December 2015: Fidelity Sanctioned For Alleged Supervisory Failures

The Financial Industry Regulatory Authority (FINRA) sanctioned Fidelity Brokerage Services for more than $1M for alleged supervisory failures related to not identifying the theft of over $1M from nine customers. Eight of these investors were seniors. They lost money after an individual pretended to be a Fidelity broker. The broker-dealer was fined $500K and ordered to pay almost $530K in restitution.

March 2008: 13 Fidelity Investments Employees Accused of Improperly Accepting Gifts

The SEC accused 13 Fidelity employees of improperly accepting over $1.6M in entertainment, travel, and other gifts paid by brokers who wanted the company’s trading business. The regulator charged Fidelity with failing to pursue the best execution related to mutual fund transactions. The firm was ordered to pay an $8M penalty.

Other Recent High Profile Cases Involving Fidelity Investments

2020: Lawyers for Fidelity Brokerage Services appeared before the US Supreme Court. They argued for keeping a federal appeals court’s 2019 ruling in place.

Fidelity’s submission of a suspicious activity report (SAR) about possible stock price manipulation had resulted in an SEC probe of specific individuals in 2012. The appeals court's found that the firm could not be held liable for telling US financial regulators about an allegedly suspect stock transaction.

2020: Fidelity Investments resolved a 2018 class-action lawsuit accusing the firm of breaching its fiduciary duty to 401(k) plan participants when the company included its own products on the plan menu. To settle, Fidelity paid $28.5M. It settled a similar lawsuit for $12M in 2014.

2018: The US Department of Labor opened an investigation into Fidelity Investments over a certain confidential fee it charged on some of its mutual funds. This yearly charge was called an infrastructure fee. Fund companies can pay for it, or they can opt to push the cost onto investors. The name of the fee allows firms not to have to disclose the charge to investors.

Skilled Broker-Dealer Negligence Lawyers

Brokerage firms have a duty to properly supervise their registered representatives and ensure that no unsuitable recommendations, misrepresentations or omissions, or other negligent or wrongful actions have occurred in customers’ accounts.

If you suspect that your portfolio losses may be due to the efforts of your Fidelity Investments broker or investment adviser, please contact our knowledgeable brokerage-dealer arbitration attorneys so that we can help you determine whether you have grounds for an investor claim.

Call SSEK Law Firm at (800) 259-9010 today.

Client Reviews
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