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FMR LLC (Fidelity Management and Research) or Fidelity Investments is an
American multinational financial services corporation. It is one of the largest
mutual fund and financial services groups in the world. Founded in 1946, the
company has since served North American investors. Fidelity Ventures is its
venture capital arm. Fidelity International Limited (FIL), was an international
affiliate founded in 1969, serving most countries in the rest of the world. In
September 2011, FIL was rebranded as 'Fidelity Worldwide Investment'.1
Fidelity Investments manages a large family of mutual funds provides fund
distribution and investment advice services, as well as providing discount
brokerage services, retirement services, wealth management, securities execution
and clearance, life insurance and a number of other services.
The founding
Johnson family, individually and through various trusts, owns stock representing
a 49% voting interest in FMR, and have signed agreements pledging to vote all
their shares as a bloc. Edward "Ned" C. Johnson 3rd is chairman of the group.
His daughter, Abigail Johnson, was once the largest single shareholder with
about 25%, but in October 2005, it was reported that she had sold a
"significant" portion of her shares to family trusts, and that there are doubts
as to whether she is still in line to succeed her father.5 Most of the remaining
51% voting interest is held by various Fidelity employees. Fidelity is presumed
under the Investment Company Act of 1940 to be controlled by the Johnson family.
The FMR mutual funds are organized as Massachusetts business trusts tied to the
lifetime of the Johnsons. Some of Fidelity's best known fund managers also own a
share in the company, most notably Peter Lynch.
Revenue in 2003 were US$9.2
billion, followed by US$10.5 billion in 2004. As of 2007, Fidelity had 47,000
employees. As of February 28, 2013, the company employs over 41,000 people.
FMR's corporate headquarters are located in Boston, Massachusetts, with the
largest U.S. operations located in Merrimack, New Hampshire; Smithfield, Rhode
Island; Westlake, Texas; Covington, Kentucky; Durham, North Carolina;
Albuquerque, New Mexico; Cincinnati, Ohio; Salt Lake City, Utah; Jacksonville,
Florida; and American Fork, Utah. It also has offices in Canada in Toronto,
Montreal, Calgary and Vancouver. Fidelity Management and Research in 2009 opened
offices in both Hong Kong and Tokyo, Japan to add great capabilities to its
small cap research.
In 2004, Fidelity established its first presence in India
by opening an office in Mumbai.7 It has a very strong presence in India with
over 4,000 employees there. Its second largest software development facility
(after the United States) is in Bangalore and Chennai.
Fidelity Investments
Ireland was established in 1996 as the European offshore development centre for
Fidelity Investments and now employs over 300 people with offices in Dublin and
Galway. Fidelity has a program for new IT graduates located in the Galway office
in Ireland.
Fidelity also has a presence in Europe with offices in France in
Paris & Marseilles and countries like Germany, Belgium, Italy, Spain and
Switzerland and London, UK for its HR Solution business HR Access.
U.S.
brokerages regulator NASD fined four FMR-affiliated broker-dealers $3.75 million
for alleged registration, supervision and e-mail retention violations in
February 2007. The broker-dealers settled without admitting or denying the
charges.
Fidelity Brokerage was ordered to pay $2 million to settle charges
that employees altered and destroyed documents in 21 of its 88 branch offices
from January 2001 to July 2002. Fidelity has internal inspections every year to
make sure it is complying with federal regulations. The Securities and Exchange
Commission accused that Fidelity management pressured branch employees to have
perfect inspections and gave advance 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.
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, for the next
five years, the two broker-dealers - Fidelity Investments Institutional Services
Company, Inc. of Smithfield, RI and Fidelity Distributors Corporation of Boston
- are required to notify Destiny Plan holders who want to increase their
investments in existing Destiny Plans that additional shares of the underlying
fund can be purchased outside the Destiny Plans without paying the additional
creation and sales charges of up to 50 percent on the first year's payments.
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