The culture of greed

[Joanne98]

Fidelity Vice Chairman Peter Lynch recently settled a complaint filed against him by the Securities and Exchange Commission.

Lynch was fined for receiving free trips and tickets.

Because Lynch seems to like freebies, I am surprised that he did not respond to my long-standing offer.

A one-way ticket to Iraq.

I’ve written numerous columns bashing Lynch. His company peddled high-commissioned products to soldiers during a time of war.

Fidelity sold contractual mutual funds. The funds had huge upfront loads. The funds were so bad that Congress finally outlawed them.

Fidelity pushed them in the military market and almost nowhere else.

When the sales practice was exposed, I offered Lynch a deal.

I offered to pay for Lynch to go to Iraq and take the place of a soldier who bought a Fidelity contractual fund.

I’m still waiting for Lynch to respond.

Lynch might be inclined to grab my freebie if I were a Fidelity vendor. His lack of response may be because I’m not doing business with Fidelity and unlikely to be in the future.

There was a time when I was sending Fidelity lots of business. When Peter Lynch managed the Fidelity Magellan fund.

Peter Lynch was the best mutual fund manager in the world. He had a reputation for integrity.

Something changed. Lynch retired as Magellan manager and became Fidelity’s vice chairman. He started hanging out with Hollywood pals such as Lily Tomlin. He was in a position to know that Fidelity was peddling contractual funds to the military.

Squeezing profits out of soldiers never made sense. Fidelity is a huge company and the military is a small market. Fidelity sold the funds long after the unsavory practice was uncovered.

Now that the Securities and Exchange Commission made their case, I understand.

Lynch and Fidelity were blinded by a culture of greed.

Lynch set a poor example. As Walter Ricciardi, deputy director of enforcement for the Securities and Exchange Commission, said after Lynch’s settlement, “The tone is set at the top.”

Vice chairman is as close to the top as you can get.

Fidelity’s traders received more than $1.5 million in gifts, travel and entertainment. A 2005 Wall Street Journal article detailed a party in Miami that included Fidelity traders.

Party-goers were supplied with private jets, female escorts and illegal drugs (Ecstasy). They paid for a demeaning party activity called dwarf tossing.

After you done some Ecstasy and thrown a dwarf across the room, maybe you can rationalize selling high-priced funds to soldiers. Coninued>

http://www.richmondregister.com/business/local_story_075232541.html?keyword=topstory

[CrispyQ]

1. Absolutely unbelievable.

snip...

"When the vice chairman starts hustling freebies, it easy for other Fidelity employees to justify it, too.

It becomes easy to forget that soldiers purchasing contractual mutual funds are going off to war."

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I see the greed & I simply cannot fathom it.

[Joe Chi Minh]

2. Maybe this will help. It wasn't a total revelation to me, but there was a lot

of fascinating detail and extrapolations, just the same:

http://uspolitics.tribe.net/thread/abb2282c-badb-464e-a08f-5bc8e63b1fd9