Fidelity Top Trader Shifts To Strategic New Biz'; Antes Up $50,000 Fine
July 18, 2005
Scott DeSano, Fidelity Investments' high-profile head trader, is now working for the firm's strategic new business development unit.
Fidelity declined to comment whether the move has anything to do with increasing heat from regulators, which now include U.S. Attorney General Michael J. Sullivan in Boston. The government is looking into allegedly lavish gifts to DeSano, Fidelity Chairman Ned Johnson and Fidelity heir apparent Abigail Johnson, as well as whether brokers offered Fidelity traders drugs in exchange for their business.
The move comes amid a broad regulatory probe into gift giving and entertainment on Wall Street. Fidelity and DeSano have been targets of this investigation, which the NASD and the Securities and Exchange Commission initially spearheaded.
DeSano was one of 14 Fidelity employees disciplined late last year for failing to supervise some of his employees. According to The Wall Street Journal, the firm's internal disciplinary action included a fine of roughly $50,000.
Among Wall Street's Most Powerful
It isn't known whether DeSano's transfer from trading to business development is connected to the gift probe, but DeSano is widely regarded as one of the most powerful traders on Wall Street. He became Fidelity's head of stock trading more than eight years ago and is renowned for overhauling the company's trading operations, saving hundreds of millions of dollars a year for fund shareholders and also squeezing profits from the Wall Street brokers who buy and sell stocks for the company's mutual funds.
DeSano was instrumental in bringing Fidelity's trading costs, once in line with the industry average, to half the industry average, as documented by research firm Abel/Noser.
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