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10 Mar, 2008

By Nicholas Paler | 09:34:56 | 10 March 2008

Peter Lynch has apologised for asking Fidelity's equity trading desk for help in acquiring free tickets to various sporting events.

Former fund manager Lynch, who was charged alongside 12 other employees for improperly accepting more than $1.6 million £800,000 in gifts from brokers, said in a statement that he lamented his actions.

He said: 'In asking the Fidelity equity trading desk for occasional help locating tickets, I never intended to do anything inappropriate, and I regret having made those requests.'

The statement came following the revelation that US regulator the Securities and Exchange Commission (SEC) had fined Lynch and his colleagues as well as Fidelity Investments.

The company itself was charged a total of $8 million in a settlement of claims stating that it let staff accept gifts such as tickets to the Super Bowl and to see British band U2.

The SEC said the firm failed to seek 'best execution' - the most favourable terms reasonably available - for its clients' mutual funds securities transactions.

Lynch himself, who was charged alongside individuals such as former senior vice president Scott DeSano, has been ordered to pay $15,948 as well as interest of $4,183.

'The order requires Lynch to cease committing or causing any further violations and to pay $15,948 in disgorgement - equalling his ill-gotten gains - and prejudgment interest of $4,183,' the SEC said.

The SEC added that the gifts, which also included theatre tickets, had compromised the firm's broker selection process.

'The broker selection process on Fidelity's equity trading desk was compromised when gifts and lavish entertainment swayed the flow of brokerage business,' it said.

'This misconduct created a serious risk of investor harm and violated Fidelity's duty of allegiance and loyalty to investors.'

Under the terms of the charge, the firm must now hire an independent compliance consultant to conduct a comprehensive review of its current policies and procedures concerning equity trading operations, conflicts and gifts.

Fidelity recognised the charges brought against it, noting the seriousness of the misconduct, but neither admitted nor denied the charges.

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