NEW YORK — In a case that could sully the reputation of legendary Fidelity Investments fund manager Peter Lynch, regulators said Wednesday that he had improperly accepted almost $16,000 worth of free sports, concert and theater tickets from brokers seeking the mutual fund giant's business.
Lynch, the former star manager of Fidelity's flagship Magellan fund and now an executive at the firm, got passes to Ryder Cup golf tournaments and concerts by rock band U2, according to the Securities and Exchange Commission. Lynch also accepted tickets to Boston Red Sox baseball games and to stage productions of "The Nutcracker" and "The Lion King," said his spokesman, Doug Bailey.
The allegations against Lynch were revealed in legal settlements that the SEC reached with Fidelity and several current and former employees. The SEC said Fidelity employees received more than $1.6 million in travel, entertainment and other gifts from brokers seeking to handle the fund company's mammoth stock-trading business.
Some Fidelity employees got trips by private jet to Bermuda, Mexico and Las Vegas and went to sporting events including the Super Bowl and the Wimbledon tennis tournament, the SEC said.
Lynch, author of several books on investing, including the bestsellers "One Up on Wall Street" and "Beating the Street," requested the tickets from Fidelity traders even though he knew they came from brokers, the regulatory agency said.
"It's disturbing that someone of Lynch's stature would participate in one of these schemes," said Edward Siedle, president of Benchmark Financial Services Inc. in Ocean Ridge, Fla. "It tarnishes his reputation."
Lynch, 64, gave many of the tickets to family and friends and, in one instance, to his gardener, Bailey said. The SEC said he received the tickets from 1999 to 2004.
"I never intended to do anything inappropriate, and I regret having made those requests," Lynch said in a statement. He agreed to pay $15,948 for the value of the tickets plus $4,183 in interest.
Lynch managed the Magellan fund from 1977 to 1990. During that period, it returned a spectacular 29% a year on average.
The SEC charged that the gifts from brokers to Fidelity employees resulted in a failure by the firm to always seek the best prices in securities trades. That could have damaged the performance of mutual funds managed by the company.
Fidelity agreed to pay $8 million to settle the SEC charges, which capped a long-running probe of misconduct at the firm. Fidelity previously agreed to pay $42 million to several funds to reimburse them for potential additional expenses incurred by its stock traders.
"The behavior that led to these settlements is not at all indicative of the ethical standards of our company and the vast majority of our employees," Fidelity said in a statement.