Fidelity Brokerage Services Hit with $600,000 Fine

The fine comes as the regulator said the company failed to adequately supervise its employees’ access to client data and the transmittal of funds from international stock plan services (SPS) accounts. 

The violations, spanning from December 2012 to October 2020, resulted in an associated person converting approximately $750,000 from 37 international plan participants.

FINRA’s investigation revealed that Fidelity’s supervisory system and written supervisory procedures (WSPs) were not adequately designed to monitor employee access and changes to SPS account data. 

The lack of oversight is said to have allowed the individual to change account information, issue unauthorised checks, and make wire transfers.

“Specifically, the associated person caused 83 unauthorized checks to be issued from international SPS accounts totaling approximately $380,000 and made 183 unauthorized wire transfers from international SPS accounts to the domestic SPS account totaling approximately $378,000,” said FINRA.

The case came to light after a client queried unexpected account transfers, prompting Fidelity to notify FINRA, conduct an internal investigation, and make full restitution to the affected parties. The individual responsible was barred by FINRA and later criminally sentenced.

In response, Fidelity is said to have enhanced its supervision by restricting data access, implementing stricter logging protocols, and improving quality control measures. 

Fidelity has accepted the fine without admitting or denying the findings.