UANI Condemns Fidelity for Maintaining Investments in Fraudulent Bonds that Support Illicit Hizballah and Iranian Activities

   

FOR IMMEDIATE RELEASE August 15, 2012 Contact: Nathan Carleton, press@uani.com Phone: (212) 554-3296   UANI Condemns Fidelity for Maintaining Investments in Fraudulent Bonds that Support Illicit Hizballah and Iranian Activities New York, NY - On Wednesday, United Against Nuclear Iran (UANI) called on Fidelity Investments (Boston, MA) and Fidelity Investments Canada Ltd. (collectively "Fidelity") to divest from their Lebanese bonds.   Fidelity holds fraudulent Lebanese sovereign bonds that support illicit Hizballah and Iranian activities, yet in discussions with UANI Fidelity has said it will only divest from them if the U.S. government were "to decide to enact new laws or regulations to broaden restrictions on investments." UANI finds this response to be wholly insufficient in the context of a discussion about fraudulent terror financing, and calls on Fidelity to immediately divest its holdings of Lebanese debt securities. In a letter to Edward Johnson, III, Chairman & CEO of Fidelity Investments, and Robert Strickland, President of Fidelity Investments Canada Ltd., UANI CEO, Ambassador Mark D. Wallace, wrote: ... In the letter, as you recall, we called on Fidelity Investments and Fidelity Investments Canada Ltd. to divest from all Lebanese sovereign bond and credit default swaps ("CDS"), showing that the value of these securities is based on a massive fraud, one that masks a money-laundering operation that not only permits Lebanon to portray a false image of economic stability but also supports terrorism by Hizballah and Iran. I further expressed UANI's belief that Banque du Liban ("BDL") and the Lebanese banking system ("LBS") meet the criteria for determination under Section 311 of the USA PATRIOT Act as a jurisdiction of primary money laundering concern that would result in their ban from the U.S. financial system. In your response, you stated that the money you are investing is not Fidelity's own, and that you have both a duty to third party investors and a duty to comply with the law. UANI believes that divesting from these securities is not only the ethical thing to do, but that continuing to hold these securities, given what you now know about them, would be a problematic position to take from a compliance and fiduciary perspective. Failure to divest from these securities could present an unjustifiable risk to Fidelity's reputation, its fiduciary duty to its fund investors, and possibly its efforts to comply with its regulatory obligations. **** 1. Failing to divest from these securities cannot be justified on an economic or fiduciary basis. Maintaining an investment in these Lebanese securities is not in the financial interest of Fidelity's clients or fund investors. We have already demonstrated that, considering the state of Lebanon's economy, the risk inherent in this investment is much higher than its yield would indicate. **** 2. Investing in these securities presents a reputational risk to Fidelity. By making this investment, you are staking your own prestige and reputation, without further diligence, on what we believe are fraudulent securities, which support an Iran/Hizballah-funded money laundering operation. Indeed, this fraud could not continue at its current level without the involvement of legitimate financial institutions like Fidelity. ... **** 3. Regulators would likely demand heightened scrutiny of this investment. Finally, up to this point, UANI has assumed for the sake of argument that your investment is legal. And, indeed, your letter seems to argue that unless Congress specifically prohibits this investment, it is permissible. However, given demonstrable "red flags" with respect to securities fraud, money laundering and terrorism financing, we believe that regulators would require enhanced scrutiny of this investment. Indeed, in a broad array of situations, any financial institution, including a large investment adviser such as Fidelity, has a duty to identify transactions and investments that pose an enhanced legal or reputational risk to the institution. ... Last month, UANI announced the results of a three month-long investigation into the influence of Iran and Hizballah in the Lebanese banking system (LBS) and Lebanon's sovereign bond market, and announced a campaign to compel legitimate financial institutions into divesting from Lebanon's bond market. UANI has previously announced that Erste-Sparinvest, Eaton Vance, Nord Est Asset Management, Aktia, and Ameriprise Financial have already divested from Lebanese bonds. Click here to read UANI's full letter to Fidelity. Click here to read the July 3 Wall Street Journal article, "Banks Get Pressed on Beirut." Click here to view UANI's research, "HIZBALLAH, LEBANON & IRAN: PARTNERS IN A SOVEREIGN MONEY LAUNDERING SCHEME." Click here to call on the U.S. Government to Sanction the Lebanese Banking System and for Bond Holders and Credit Agencies to end Lebanon Business.   ###                                                                        United Against Nuclear Iran (UANI) is a program of the American Coalition Against Nuclear Iran, Inc., a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. The prospect of a nuclear-armed Iran should concern every American and be unacceptable to the community of nations. Since 1979 the Iranian regime, most recently under President Mahmoud Ahmadinejad's leadership, has demonstrated increasingly threatening behavior and rhetoric toward the US and the West. Iran continues to defy the International Atomic Energy Agency (IAEA) and the United Nations in their attempts to monitor its nuclear activities. A number of Arab states have warned that Iran's development of nuclear weapons poses a threat to Middle East stability and could provoke a regional nuclear arms race. In short, the prospect of a nuclear armed Iran is a danger to world peace. United Against Nuclear Iran (UANI) is a non-partisan, broad-based coalition that is united in a commitment to prevent Iran from fulfilling its ambition to become a regional super-power possessing nuclear weapons.  UANI is an issue-based coalition in which each coalition member will have its own interests as well as the collective goal of advancing an Iran free of nuclear weapons. The Objectives of United Against a Nuclear Iran Inform the public about the nature of the Iranian regime, including its desire and intent to possess nuclear weapons, as well as Iran's role as a state sponsor of global terrorism, and a major violator of human rights at home and abroad; Heighten awareness nationally and internationally about the danger that a nuclear armed Iran poses to the region and the world; Mobilize public support, utilize media outreach, and persuade our elected leaders to voice a robust and united American opposition to a nuclear Iran; Lay the groundwork for effective US policies in coordination with European and other allies; Persuade the regime in Tehran to desist from its quest for nuclear weapons, while striving not to punish the Iranian people, and; Promote efforts that focus on vigorous national and international, social, economic, political and diplomatic measures. UANI is led by an advisory board of outstanding national figures representing all sectors of our country.

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