Fidelity Investments has agreed to pay $8m to settle US Securities and Exchange Commission charges that several of its brokers received $1.6m in gifts over a period of years from clients who were allegedly hoping to do more business with the firm.
13 current and former employees (although most of those fingered have actually now left the firm) are said to have received what could be construed as inducements from clients like free tickets for U2 concerts, the Ryder Cup, the Super Bowl and for performances of 'The Lion King' and 'The Nutcracker'.
The highlight of all these years of generosity, however, was a $160,000 2003 'bachelor' party thrown for former Fidelity star trader Thomas Bruderman (and allegedly paid for by clients, including Jefferies & Co, Lazard and SG Cowen), which was said to have featured an appearance by Madonna (not singing), female escorts, ecstasy pills and a dwarf named Danny Black, who describes himself as the Heidi Fleiss of dwarf talent'. Although Black was originally hired as a waiter, he allowed himself to be 'tossed' by guests.
For the uninitiated, 'dwarf-tossing' became popular in the 1980s, and involves throwing a dwarf dressed in a Velcro suit, usually at a Velcro-covered wall. The dwarf would normally be wearing a crash helmet and have handles on the back of his (or her) padded clothing. For those interested, dwarfs may be rented for parties and promotional events via the popular website www.shortdwarf.com (where size really matters). NB a dwarf is generally defined as an individual who is 4' 10'' tall or shorter.
Fidelity said in a statement that 'we do recognise the seriousness of the misconduct. The behaviour that led to these settlements is not at all indicative of the ethical standards of our company'.
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