Another trading desk employee quits Fidelity
Another member of Fidelity Investments vaunted stock-trading desk has left the firm, the fifth to depart since federal authorities last year began investigating gift-giving and entertainment practices between its traders and brokers who handled the mutual fund giant's business.
David K. Donovan Jr., 42, who headed the group that trades technology stocks and is considered one of the firm's best traders, left the firm Tuesday.
''I want to move on and do something different," Donovan said in an interview last night. He said he wasn't fired and that his departure was not related to the gifts issues inside Fidelity.
Fidelity confirmed Donovan's departure last night, but as is company policy, declined to elaborate, citing employee confidentiality issues.
Donovan is one of several Fidelity traders who have brothers or other relatives working at brokerage firms that do business with the mutual fund giant. Peter Donovan works for Banc of America Securities in Boston and traded with his brother at Fidelity, according to attorneys and others involved in the investigation.
Peter Donovan declined to comment last night, as did a Banc of America Securities spokesman.
Among the many issues federal authorities are investigating is whether Fidelity's shareholders did not get the best deal on stock trades because the firm's traders steered business to relatives and friends, or to those brokers who provided them with the best entertainment and other treats.
Fidelity disclosed in December that it disciplined 14 employees for violations of the firm's gifts and gratuities policies, and that it was ''considering strengthening our procedures" and ''enhancing our compliance oversight" in circumstances where a Fidelity investment employee has a relative who works at a company that does business with the firm.
Fidelity also has said its own investigation has not uncovered any instances where family relationships ''resulted in any harm to the Fidelity mutual funds," or where any ''inappropriate and unauthorized behavior on the part of any individual" resulted in investors being shortchanged in trades for the funds.
Last month Fidelity installed a new team of managers underneath the head of the stock trading desk, Scott DeSano, who, according to attorneys in the case, was among the 14 individuals disciplined in December. Fidelity said at the time that the five new managers were not installed to undermine DeSano's authority, nor were they a first step to easing him out of power. Rather, the new managers would provide ''operational expertise" to assist DeSano, Fidelity said.
DeSano's attorney could not be reached for comment.
No one has been charged yet in the case, but federal authorities have issued subpoenas to dozens of individuals at Fidelity and at the many brokerage and investment firms that do business with it, or are trying to secure a piece of its prodigious trading volume. Many of those individuals have been interviewed under oath by investigators at the Boston office of the Securities and Exchange Commission, said attorneys and others involved in the case.
Andrew Caffrey can be reached at caffrey@globe.com.
