Fidelity Investments said Friday that it will pay $2.6 billion to resolve a securities fraud case related to a $10 billion investment by billionaire hedge fund manager Carl Icahn’s Vanguard Group.
In a filing with the Securities and Exchange Commission, Fidelity said it will make a $2 billion contribution to a fund to be named in the case and will pay a $5.3 billion settlement fee to a former employee.
Fidelity’s board of directors also approved a $1.5 billion payment to settle claims by former employee and former director Elizabeth Wertheimer and former employee James Gifford, who were also named as defendants in the fraud case.
The settlement is subject to approval by Fidelity’s investment managers.
The company also agreed to pay a fine of $2 million and pay a civil penalty of $1 million.