Massachusetts says Fidelity rubber-stamped options applications

Massachusetts says Fidelity rubber-stamped options applications
Regulator's complaint details examples of repeated applications – in some instances as many as 13 in one month.
JAN 26, 2022

Massachusetts securities regulators have charged Fidelity Brokerage Services with unethical and dishonest conduct and practices in the securities business over its rubber-stamping of options trading applications.

Citing the company’s “half-hearted and lackadaisical attitude” toward safeguarding retail investors, the state’s securities division charged Fidelity with “failure to properly vet customers who applied to be approved for options and margin trading.”

Regulators said that Fidelity’s application review system allowed customers to submit multiple applications, each time with the information altered until the customers met the requirements to be approved.

The administrative complaint, filed by Secretary of the Commonwealth William F. Galvin's securities division, details examples of repeated applications – in some instances as many as 13 in one month – with inflated financials, investment experience and employment information that Fidelity reviewers failed to notice, despite having contrary information already in the firm’s system.

The state is seeking to censure Fidelity, require it to retain an independent compliance consultant to remedy the conditions, and impose an administrative fine that a hearing officer will determine at a future date.

Latest News

SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees
SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees

Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.

Apella Wealth comes to Washington with Independence Wealth Advisors
Apella Wealth comes to Washington with Independence Wealth Advisors

The Harford, Connecticut-based RIA is expanding into a new market in the mid-Atlantic region while crossing another billion-dollar milestone.

Citi's Sieg sees rich clients pivoting from US to UK
Citi's Sieg sees rich clients pivoting from US to UK

The Wall Street giant's global wealth head says affluent clients are shifting away from America amid growing fallout from President Donald Trump's hardline politics.

US employment report reactions: Overall better than expected, but concerns with underlying data
US employment report reactions: Overall better than expected, but concerns with underlying data

Chief economists, advisors, and chief investment officers share their reactions to the June US employment report.

Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading
Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading

"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.