Fidelity’s ‘Boiler Room’ Moment
Some of this Fidelity lore has been well discussed, but any time the Globe stoops to mention “dwarf-tossing”—in the business section, no less—I think it deserves a mention.
The new part of this saga is that Fidelity has agreed to pay a cool $8 mil in SEC fines for taking shiny objects from brokers looking for its business. Thankfully, it gives everyone a chance to dredge up the Thomas Bruderman Affair, which included $160K of broker money dropped on the trader’s 2003 bachelor party.
The wild weekend included a bag of ecstasy pills provided to Bruderman, trips to strip joints, “adult entertainment” from two women whom the traders’ supervisor believed were prostitutes, and such bizarreness as a “dwarf tossing” contest involving Danny Black, who runs a business called Shortdwarf.com and is hired to entertain at parties, according to the SEC documents and previously published reports on the party.
Some of the other gifts noted in the SEC report to Fidelity traders seem pretty typical: Pats tickets, flights, golf trips, etc. The standouts are a $10k payoff to a bookie and Bruderman’s “entry to a racing school,” which cost over $5,000.
The stereotype of stock traders as fired-up frat boys stuffed into Armani suits is not aided by this back-and-forth between Bruderman and a broker/pusher, courtesy of a footnote in the new SEC report:
Brokers sometimes offered illegal drugs to Bruderman. For example, in February 2002, a broker through whom Bruderman executed securities transactions for Fidelity clients sent him an email asking, “U want beans.” (Certain traders and brokers used slang such as “beans” and “Scooby snacks” to refer to ecstasy.) On other occasions, Bruderman solicited drugs from brokers. For example, in January 2004, he asked a broker, “Long any snacks?” The broker responded, “For the Superbowl??? I most likely will be able to take care of that.” Bruderman replied, “I would like to order 10 if you have a guy?”
Sad, really. Bruderman was about 33 at the time, using lame drug references that your 14-year-old kid would think is NARC-y. And, yeah — what happened to cocaine and scotch for traders? I’d rather that than think of my 401k tanking because some trader’s interpretive glow-in-the-dark yo-yo dance to some Deep House compilation kept the desk from ignoring the Nikkei.
The whole report is a fantastic view into the world of traders and their awful taste in music. An email between Bruderman and a broker:
In October 2003, Bruderman complained to one broker that a broker at another firm had been unable to get him tickets to a Bare Naked Ladies concert: “Say he has no tickets left. Gave em all to [name omitted] and his hedge fund pals. I think I am going to request a change in coverage.”
Yep. This is a day that liberal arts grads can savor.