Massachusetts Regulators Say Fidelity Rubber-Stamped Options Applications

Posted on January 27th, 2022 at 2:16 PM
Massachusetts Regulators Say Fidelity Rubber-Stamped Options Applications

From the Desk of Jim Eccleston at Eccleston Law:

Massachusetts securities regulators have filed suit against Fidelity Brokerage Services alleging unethical practices relating to the firms’ rubber-stamping of options trading applications.

Massachusetts’ securities division has emphasized Fidelity’s “failure to properly vet customers who applied to be approved for options and margin trading”, and has scrutinized the firm’s “half-hearted and lackadaisical attitude” toward protecting retail clients. Massachusetts regulators allege that Fidelity’s application review protocol enabled clients to submit several applications with altered information until the clients satisfied the account requirements. 

The administrative compliant discusses examples of repetitive applications with inaccurate financials, investment experience and employment information. The complaint further alleges that Fidelity failed to review and subsequently notice the contradictions even though the firm possessed accurate client information in its system. The complaint seeks to censure Fidelity and compels the firm to hire an independent compliance consultant to remedy the oversight failures. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, Fidelity Brokerage Services

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