Massachusetts Blames Fidelity Investments of Failing to Block Unregistered Advisers

Massachusetts’ securities regulators have accused mutual fund giant, Fidelity Investments, of allowing unregistered investment advisers to make trades in customer accounts for the last decade, generating substantial fees for the unregistered advisers and for Fidelity.

According to the regulators, Fidelity’s conduct activity is “emblematic of a systemic failure to detect and prevent unregistered activity.” Fidelity allowed unregistered investment advisers to use Fidelity’s trading platform to conduct business as far back as 2005. These advisers directed clients to submit trade authorizations to Fidelity to give them trading access to their accounts. Regulators found that Fidelity did not analyze whether the people to whom account owners gave trading authority were properly registered to place trades for investors.

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The attorneys at Dimond Kaplan & Rothstein, P.A. have helped recover more than $100 million from some of the largest banks and brokerage firms in the world. If you or someone you know has invested with an unregistered investment adviser, or believe your adviser lacks the proper registration, you may have certain legal rights that require your immediate attention. Contact us to schedule an appointment or consultation today.

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