has gone through with its plan to become a limited liability corporation.
reports that Fidelity filed with the SEC
on October 15 to complete the process set in motion in late June of this year when private shareholders of the company ratified the move. Fidelity's spokeswoman, Anne Crowley, told Bloomberg
that the move was a way to simplify the company's capital structure and is in no way a pre-cursor to going public or a sale.
Earlier this year, when the move was first reported by The Boston Globe
, ex-employees told the pub that the limited liability filing was part of a master plan by Ned Johnson to reduce the private shareholder count to 100. This would earn the company "S corporation" tax status, allowing profits to be taxed only once. Crowley declined to comment to Bloomberg on whether or not tax benefits played into the filing.
At the time of shareholder ratification, industry consultant Geoff Bobroff, told the MFWire
that limited liability status could negatively impact incentives for top employees of the company. Since then, a steady stream of executives at the company have filed out the door, including brokerage head Ellyn McColgan, who had been rumored to be in the running for Ned's job.
Stay ahead of the news ... Sign up for our email alerts now