Massachusetts’ Securities Regulator Says Fidelity Brokerage Services “Rubber Stamped” Options Trading Applications

William Galvin, head of the Massachusetts Securities Division, has filed an administrative complaint against Fidelity Brokerage Services. The firm has been accused of not making a good enough attempt to vet investors’ applications before allowing them to engage in options and margin trading. This led to financial losses for investors.

The state regulator accused the broker-dealer of having a “halfhearted and lackadaisical attitude” when it came to protecting retail investors. Fidelity Brokerage Services failed to reasonably perform due diligence related to approving customers’ accounts—a violation of Massachusetts securities laws. Fidelity Brokerage Services is a subsidiary of Boston-based Fidelity Investments.

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