Fidelity Fined Over Computer Problems

Regulators fined Fidelity Brokerage Services over computer problems that caused hundreds of errors in client accounts, but the company was cleared to accept new London customers after a six-month ban. Fidelity estimates it lost about 500 customers after the computers slowed down dividend payments and caused other problems, but it declined comment on British media reports that the lost business was estimated at $48.6 million. Fidelity installed its new computer in April 1996 but failed to adequately test it or train all employees, and operations went “significantly out of control,” according to a statement from Britain’s Securities and Futures Authority. The SFA imposed a fine of $324,000 and told Fidelity, a unit of Boston-based FMR Corp., to pay $263,250 in costs toward the investigation. But for Fidelity, the most important thing was permission to take on new customers and start new operations, which the SFA had banned on Oct. 31. “This confirms our operational difficulties are behind us,” Fidelity spokesman Phil West said.