UNITED STATES OF AMERICA

Before the
SECURITIES AND EXCHANGE COMMISSION

INVESTMENT ADVISERS ACT OF 1940

Release No. 2814 / December 11, 2008

INVESTMENT COMPANY ACT OF 1940

Release No. 28533 / December 11, 2008

ADMINISTRATIVE PROCEEDING
File No. 3-12978
______________________________
)
In the Matter of )
)
SCOTT E. DeSANO, ) ORDER MAKING FINDINGS AND IMPOSING
THOMAS H. BRUDERMAN, ) REMEDIAL SANCTIONS AND A CEASE-AND-
TIMOTHY J. BURNIEIKA, ) DESIST ORDER PURSUANT TO SECTION
ROBERT L. BURNS, ) 203(f) OF THE INVESTMENT ADVISERS ACT
DAVID K. DONOVAN, ) OF 1940 AND SECTIONS 9(b) AND 9(f) OF THE
EDWARD S. DRISCOLL, ) INVESTMENT COMPANY ACT OF 1940 AS TO
JEFFREY D. HARRIS, ) TIMOTHY J. BURNIEIKA
CHRISTOPHER J. HORAN, )
STEVEN P. PASCUCCI and )
KIRK C. SMITH, )
)
Respondents. )
______________________________)

I.

On March 5, 2008, the Securities and Exchange Commission (“Commission”) instituted

public administrative and cease-and-desist proceedings pursuant to Sections 203(f) and 203(k) of
the Investment Advisers Act of 1940 (“Advisers Act”) and Sections 9(b) and 9(f) of the
Investment Company Act of 1940 (“Investment Company Act”) against Scott E. DeSano,
Thomas H. Bruderman, Timothy J. Burnieika (“Burnieika” or “Respondent Burnieika”), Robert
L. Burns, David K. Donovan, Edward S. Driscoll, Jeffrey D. Harris, Christopher J. Horan,
Steven P. Pascucci, and Kirk C. Smith.

II.

In response to these proceedings, Respondent Burnieika has submitted an Offer of

Settlement (“Offer”) which the Commission has determined to accept. Solely for the purpose of
these proceedings and any other proceedings brought by or on behalf of the Commission, or to
which the Commission is a party, and without admitting or denying the findings herein, except as
to the Commission’s jurisdiction over him and the subject matter of these proceedings, which are
admitted, Respondent Burnieika consents to the entry of this Order Making Findings and
Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Section 203(f) of the
Investment Advisers Act of 1940 and Sections 9(b) and 9(f) of the Investment Company Act of
1940 as to Timothy J. Burnieika (“Order”), as set forth below.

III.

On the basis of this Order and Respondent Burnieika’s Offer, the Commission finds1 that:

Settling Respondent

1. Burnieika, age 39, is a resident of Cohasset, Massachusetts. At all relevant

times, Burnieika was employed as a primary trader on the equity trading desk of FMR Co., Inc.
located in Boston, Massachusetts. Burnieika has been associated with FMR Co., Inc. since 2000.

Other Relevant Parties

2. Fidelity Management & Research Company (“FMR”) is a privately held

Massachusetts corporation registered with the Commission as an investment adviser pursuant to
Section 203(c) of the Advisers Act, with its principal place of business in Boston, Massachusetts.
FMR is a wholly owned subsidiary of FMR LLC, a privately held Delaware corporation. FMR
is an adviser to various institutional clients and has approximately $1.25 trillion in assets under
management. FMR’s institutional clients include a group of approximately 350 registered
investment companies marketed under the “Fidelity Investments” trade name and managed by
FMR and its affiliates (hereafter “the Fidelity Funds”).

3. FMR Co., Inc. is a privately held Massachusetts corporation registered with the
Commission as an investment adviser pursuant to Section 203(c) of the Advisers Act, with its
principal place of business in Boston, Massachusetts. FMR Co., Inc. is a wholly owned
subsidiary of FMR (collectively “Fidelity”) and provides portfolio management services as a
sub-adviser to certain clients of FMR, including the Fidelity Funds.2

Summary

4. These proceedings concern Burnieika’s acceptance of travel and gifts from

securities brokerage firms (“brokerage firms”) with which he, through Fidelity, conducted

1
The findings herein are made pursuant to Respondent Burnieika’s Offer and are not binding on any other person or
entity in this or any other proceeding.
2
On March 5, 2008, the Commission instituted related administrative and/or cease-and-desist proceedings against
Fidelity and certain of its employees. See In the Matter of Fidelity Management & Research Co. and FMR Co. Inc.,
Advisers Act Release No. 2713, Admin. Proc. File No. 3-19276 (March 5, 2008); In the Matter of Peter S. Lynch,
Company Act Release No. 28189, Admin. Proc. File No. 3-12980 (March 5, 2008); In the Matter of Bart A. Grenier,
Advisers Act Release No. 2714, Admin. Proc. File No. 3-12977 (March 5, 2008); In the Matter of Marc C. Beran,
Advisers Act Release No. 2716, Admin. Proc. File No. 3-12979 (March 5, 2008).
2
business on behalf of the Fidelity Funds. During the period from January 1, 2002 to October
2004 (the “Relevant Period”), Burnieika accepted a significant amount of travel and gifts, mostly
consisting of premium tickets to professional sporting events that he did not attend with the
representatives of the brokerage firms. In addition, representatives of brokerage firms paid for
some of his travel, lodging and other costs on a number of trips, certain of which were by private
jet. By accepting the travel, gifts and tickets, Burnieika willfully3 violated Section 17(e)(1) of
the Investment Company Act.

Background

5. During the Relevant Period, Burnieika worked as a primary trader on Fidelity’s

equity trading desk and was an affiliated person of FMR Co., Inc., which is an affiliated person
of registered investment companies (the Fidelity Funds). Fidelity’s advisory clients (including
the Fidelity Funds) gave Fidelity authority to select brokerage firms to execute securities
transactions in their managed accounts. Portfolio managers initiated securities trades by
contacting Fidelity’s equity trading desk with orders to purchase or sell securities for client
accounts under their management. As a Fidelity trader, Burnieika was responsible for, among
other things, selecting brokerage firm(s) from a list of brokerage firms approved by Fidelity to
execute securities transactions to fulfill the portfolio managers’ orders.

Burnieika Accepted Travel and Gifts from Brokerage Firms

6. Burnieika received a significant amount of travel and gifts from representatives of

brokerage firms during the Relevant Period, consisting primarily of numerous tickets to events
that the broker did not attend, including Celtics and Red Sox playoff and regular season games,
and concerts, including by Bruce Springsteen. Brokers also provided some of Burnieika’s
airfare, lodging and other expenses on a number of trips – certain of which were by private jet –
to such destinations as the Super Bowl, Las Vegas, and Aspen, Colorado.

Burnieika Violated Section 17(e)(1) of the Investment Company Act

7. As a result of the conduct described above, Burnieika willfully violated Section

17(e)(1) of the Investment Company Act, which makes it unlawful for an affiliated person of a
registered investment company, or an affiliate of an affiliate, when acting as an agent, to accept
compensation from any source (other than a salary or wages from the registered investment
company) for the purchase or sale of any property to or for the registered investment company.
A violation of Section 17(e)(1) is complete upon receipt of the compensation. Burnieika was an
affiliated person of Fidelity, which is an affiliated person of investment companies (the Fidelity
Funds), because Fidelity advises those funds. Burnieika’s receipt of gifts and travel from
representatives of brokerage firms constituted compensation in violation of Section 17(e)(1) of
the Investment Company Act.
3
A willful violation of the securities laws means merely “‘that the person charged with the duty knows what he is
doing.’” Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C.
Cir. 1949)). There is no requirement that the actor “‘also be aware that he is violating one of the Rules or Acts.’” Id.
(quoting Gearhart & Otis, Inc. v. SEC, 348 F.2d 798, 803 (D.C. Cir. 1965)).

3
 IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest
to impose the sanctions agreed to in Burnieika’s Offer.

Accordingly, pursuant to Section 203(f) of the Advisers Act and Sections 9(b) and 9(f) of
the Investment Company Act, it is hereby ORDERED that:

A. Respondent Burnieika cease and desist from committing or causing any

violations and any future violations of Section 17(e)(1) of the Investment Company Act;

B. Respondent Burnieika is censured; and

C. Respondent Burnieika shall, within ten days of the entry of this Order, pay
disgorgement of $39,000, prejudgment interest of $13,420 and a civil money penalty in the
amount of $30,000 to the United States Treasury. If timely payment is not made, additional
interest shall accrue pursuant to SEC Rule of Practice 600. Payment shall be: (A) made by
United States postal money order, certified check, bank cashier's check or bank money order; (B)
made payable to the Securities and Exchange Commission; (C) hand-delivered or mailed to the
Office of Financial Management, Securities and Exchange Commission, Operations Center,
6432 General Green Way, Alexandria, VA 22312, Stop 0-3; and (D) submitted under cover letter
that identifies Burnieika as a Respondent in these proceedings, the file number of these
proceedings, a copy of which cover letter and money order or check shall be sent to David P.
Bergers, Regional Director, Securities and Exchange Commission, 33 Arch St., 23rd Floor,
Boston, MA 02110.

By the Commission.

Florence E. Harmon
Acting Secretary