The Boston Globe reports on a lawsuit by former Fidelity Investments employee Jackie Hosang Lawson that alleges Lawson was forced to resign after calling attention to problems with the the mutual fund industry giant's financial statements:
In her complaint, Lawson alleges Fidelity retaliated against her after she pointed out violations of federal rules 'relating to fraud against shareholders of Fidelity mutual funds.
...She raised concerns that initially drew praise but also hostile responses from others, she claims, and eventually led Fidelity to give a promotion to another employee 'to cover up fund profitability issues.'
She continued to raise issues and also contacted federal agencies including the Securities and Exchange Commission, the suit states. (The head of the SEC's Boston office, David Bergers, declined to comment.)
According to Lawson's suit, she was yelled at, berated, and assigned unrealistic deadlines for projects as a result, leading her to resign last fall. She also said Fidelity wouldn't allow her to speak with the trustees.
I am currently in a predicament where I can no longer honestly stand behind the financials that are presented to the Fidelity Mutual Fund Board of Trustees,' she wrote colleagues in a resignation letter."
We have no idea if these allegations have merit (much less what the impact on Fidelity fund shareholders might be), but it could relate to our long held belief that fund companies sometimes favor smaller and newer funds to boost returns and marketability (often at the expense of other funds within the same family). These new fund advantages could include allocating them shares of favorable IPO (initial public offering) or sticking some fees with larger funds where the performance impact will be minimal.
The Boston Globe reports on a lawsuit by former Fidelity Investments employee Jackie Hosang Lawson that alleges Lawson was forced to resign after calling attention to problems with the the mutual fund industry giant's financial statements:
In her complaint, Lawson alleges Fidelity retaliated against her after she pointed out violations of federal rules 'relating to fraud against shareholders of Fidelity mutual funds.
...She raised concerns that initially drew praise but also hostile responses from others, she claims, and eventually led Fidelity to give a promotion to another employee 'to cover up fund profitability issues.'
She continued to raise issues and also contacted federal agencies including the Securities and Exchange Commission, the suit states. (The head of the SEC's Boston office, David Bergers, declined to comment.)
According to Lawson's suit, she was yelled at, berated, and assigned unrealistic deadlines for projects as a result, leading her to resign last fall. She also said Fidelity wouldn't allow her to speak with the trustees.
I am currently in a predicament where I can no longer honestly stand behind the financials that are presented to the Fidelity Mutual Fund Board of Trustees,' she wrote colleagues in a resignation letter."
We have no idea if these allegations have merit (much less what the impact on Fidelity fund shareholders might be), but it could relate to our long held belief that fund companies sometimes favor smaller and newer funds to boost returns and marketability (often at the expense of other funds within the same family). These new fund advantages could include allocating them shares of favorable IPO (initial public offering) or sticking some fees with larger funds where the performance impact will be minimal.
LINK