CSFB Is Fined $100M over US Float 'Abuses'
Mclean, James, The Evening Standard (London, England)
Byline: JAMES MCLEAN
CREDIT Suisse First Boston has agreed to pay $100 million ([pound]70 million) to American regulators for abuses surrounding new share listings at the height of the technology boom.
According to the Wall Street Journal, the investment banking giant has agreed to pay the fifth-largest fine in securities-industry history to settle an 18-month Federal investigation into the way the bank handled initial public offerings.
The investigation has centred on whether it favoured certain investors by allocating flotation stock to them in return for a cut of the profits they made from selling the shares into a rising market.
It also probed whether the investors had agreed to enlarged commission charges on other trades in return for IPO allocations.
CSFB is thought to have earned about $700 million from underwriting and fees during the height of the technology boom, outstripping even its biggest rivals in the new-listings arena. The bank is unlikely to admit liability or guilt as part of a settlement with the Securities and Exchange Commission and the National Association of Securities Dealers.
However, the deal is likely to include a pledge from CSFB to prevent future improprieties in selling IPOs, and may form the basis for new guidelines in the ways companies should distribute shares for new issues. …