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To: maceng2 who wrote (468)	10/7/2003 1:20:09 AM
From: maceng2	Read Replies (1) of 1417

Spitzer inquiry subpoenas Fidelity By Victoria Griffith in Boston and Vincent Boland in New York Published: October 7 2003 0:46 \| Last Updated: October 7 2003 0:46 [looks like Fidelity is OK here. Nice to know a supposed rock is acting like a rock -g-] news.ft.com Fidelity Investments said on Monday it had received a subpoena in a widening investigation into trading abuses in the mutual funds market that has already hit several of its rivals. Fidelity, the largest mutual funds provider in the US, said it had received a subpoena from the office of Eliot Spitzer, the New York state attorney-general investigating whether some investors were given privileged trading concessions, and was co-operating. The probe has already resulted in sackings at several financial services companies and has set up Wall Street for a second confrontation with Mr Spitzer. Late last year he secured a $1.4bn compensation package from investment banks to settle charges that they published tainted stock research. Mr Spitzer launched the latest probe after evidence emerged that some investors engaged in "late trading", using old prices to trade in and out of funds. The practice of "market timing", which also involves some investors getting favourable treatment over others, is also under scrutiny. The probe has involved Alliance Capital, Prudential Securities, Merrill Lynch and Bank of America among others. Steven Markovitz, a former trader with the hedge fund Millennium Partners, last week pleaded guilty to fraud charges involving "late trading" of mutual fund shares. Merrill Lynch later fired three brokers who were alleged to have helped Mr Markovitz. Fidelity said on Monday night that it believed the request for information was related to the probe that involved Alliance and Prudential. But the firm insisted it had no intention of letting any employees go. A spokesperson said: "Fidelity has a long history of opposing market timing [for favoured treatment of wealthy clients]. We had already placed our operations under a microscope before the subpoena and we have no reason to believe any of our employees have done anything wrong." Fidelity says in fund prospectuses and marketing material, that it opposes "excessive trading".

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