Fidelity chairman deals with fallout from sexual
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[October 23, 2017]
BOSTON (Reuters) - Less than a
year into her tenure as chairman of Fidelity Investments, Abigail
Johnson faces a crisis amid allegations that the mutual fund giant has a
men's club mentality.
Johnson is addressing inappropriate workplace conduct such as sexual
harassment by hiring a consulting firm to review employee behavior
stretching back years, the Wall Street Journal reported on Sunday.
"Fidelityís policies specifically prohibit harassment in any form," the
company said in a statement on Sunday. "When allegations of these sorts
are brought to our attention, we investigate them immediately and take
prompt and appropriate action."
Fidelity would not confirm the review by consultants.
In the past month, Johnson collared the attention of Fidelity's stock
funds team when she signed off on the dismissal of star portfolio
manager Gavin Baker, who had been accused of sexual harassment,
according to a person familiar with the situation. The Wall Street
Journal was the first to report the circumstances surrounding Baker's
departure on Oct. 13. Through a spokeswoman at public relations firm
Goldin Solutions, Baker has denied allegations of sexual harassment.
Brian Hogan, president of Fidelity's stock funds division, held an
emergency meeting on Oct. 16 to ensure everyone is aware of the
company's zero-tolerance policy for inappropriate conduct, according to
a source familiar with the meeting. He also reiterated that employees
have various ways, such as calling the chairman's hotline, to report any
He called the meeting partly to address concerns raised in connection
with the ouster of Baker, who ran the $16 billion OTC (over the counter)
Portfolio. He had one of the hottest hands in the mutual fund industry,
generating a 3-year annualized return of 19.03 percent, or better than
99 percent of his large-cap growth fund peers, according to Morningstar.
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A sign marks a Fidelity Investments office in Boston, Massachusetts,
U.S. September 21, 2016. REUTERS/Brian Snyder -
The Wall Street Journal was the first to report Hogan's meeting in a Sunday
story that also said Fidelity had dismissed Robert Chow, who had been with the
money manager for nearly 30 years.
A person familiar with the situation confirmed the report that Chow had been
forced out after being accused of making inappropriate sexual comments. Chow,
who was known as a value investor earlier in his career, had most recently
worked as a senior investment manager for private portfolios. He did not return
messages seeking comment.
Fidelity's handling of the claims coincides with a deluge of sexual harassments
complaints against powerful executives in the entertainment industry that has
opened a fierce debate about workplace abuse of women in the wider world.
Johnson recently said she is on a mission to hire more women at Fidelity. Last
month, she said Fidelity had a shortage of women to give financial advice to
female clients at its investment branches.
"We have a real need in our business to recruit more women," Johnson said in a
September interview on Bloomberg TV. "...We donít have enough women who are
customer facing reps to serve all the women customers who come in and ask for
(Reporting by Carmel Crimmins in New York and Tim McLaughlin in Boston; Editing
by Diane Craft and Mary Milliken)
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