Fidelity to Pay Funds $42 Million After Traders Took Gifts

Fidelity Investments has agreed to pay $42 million to its mutual funds related to the discovery that a number of its equity traders accepted lavish gifts and entertainment from brokerage firms between 2002 and 2004.

The payments are being made at the recommendation of a group of independent fund trustees who conducted an investigation of the activity.

Fidelity said in a statement posted on its Web site Thursday that it agreed with the independent trustees that the payment was appropriate "in spite of the absence of proof that the funds experienced diminished execution quality." ...