Fidelity Investments

The Fidelity Fund incorporated in Massachusetts on May 1, 1930, with Edward C. Johnson II serving as president. The corporate structure changed in 1946 and became known as Fidelity Management & Research (FMR).

In 1969, the company formed Fidelity International (FIL) to serve non-U.S. markets and subsequently spun it off in 1980 into an independent entity owned by its employees.

In 1982, the company began offering 401(k) products, followed by computerized stock trading offerings in 1984.

In the 1990s, Fidelity launched its first commercial donor-advised fund, became the first mutual fund company to offer a webpage, and appointed Robert Pozen as CEO.

In September 2003, the company launched its first exchange-traded fund, the Fidelity Nasdaq Composite Index Tracking Stock Fund (ONEQ). The company acquired Wealth Lab the following year, which was laterdecommissioned in 2020.

In 2007, the company changed its legal structure to a limited liability company, with FMR LLC becoming the owning entity. Fidelity Ventures, its venture capital arm, was shut down in 2010.

In 2014, Abigail Johnson became president and CEO of Fidelity Investments (FMR) as well as chairman of Fidelity International (FIL). She reduced dependence on open-ended mutual funds, instead having the company focus on financial advice, brokerage services, and venture capital.

In August 2018, Fidelity introduced mutual funds with no fees or expense ratios.

Legal and regulatory issues

Document retention fines

In February 2007, the NASD, a division of the Financial Industry Regulatory Authority, fined four FMR-affiliated broker-dealers $3.75 million for alleged registration, supervision and e-mail retention violations. The broker-dealers settled without admitting or denying the charges.

In 2004, Fidelity Brokerage paid $2 million to settle charges by the U.S. Securities and Exchange Commission that employees altered and destroyed documents in 21 of its 88 branch offices between January 2001 and July 2002. Fidelity has internal inspections every year to make sure it is complying with federal regulations. Management was accused of pressuring branch employees to have perfect inspections and gave notice of the inspections and that at least 62 employees destroyed or altered potentially improper documents maintained at branch offices including new account applications, letters of authorization and variable annuity forms.

Misrepresentations

In May 2007, NASD fined two Fidelity broker-dealers $400,000 for preparing and distributing misleading sales literature promoting Fidelity's Destiny I and II Systematic Investment Plans, which were sold primarily to U.S. military personnel. As part of the settlement, the FMR affiliates were required to notify Destiny Plan holders that additional shares of the underlying fund can be purchased without paying additional sales charges.

Employee stealing from clients

In January 2025, the company was fined $600,000 by the Financial Industry Regulatory Authority for lax supervision after an employee stole $750,000 from the accounts of 37 international clients over an eight year period from 2012 to 2020.

Tardy processing

In May 2025, the company was fined and censured by federal regulators for taking weeks to complete certain customer transactions that should have taken days.

Accepting gifts from brokerages

In December 2006, the company was fined $42 million after some employees accepted gifts from salespeople of Jefferies Group in violation of the company's policies. The firm was fined an additional $3.75 million in February 2007 and $8 million in 2008. Gifts included private chartered flights, tickets to the 2004 Super Bowl, Wimbledon Championships and the US Open tennis tournament; tickets to Justin Timberlake, U2, and Christina Aguilera concerts; and high-end wines such as 1993 Château Pétrus.