Sorry. Not BT related. But good on Massachusetts. The state also has a nasty anti-bribery statute that would come in handy when examining the practice of preferential IPO placements in exchange for banking business. Not that that ever happened.
Reuters
Massachusetts accuses CSFB of deceiving investors
Monday October 21, 6:20 pm ET
By Per Jebsen
(Updates with CSFB response in paragraph 9, 10; state seeks $2 million fine in paragraph 3, details)
NEW YORK, Oct 21 (Reuters) - Massachusetts regulators on Monday charged Credit Suisse First Boston of misleading investors by issuing biased research that was favorable to clients and resulted in the bank earning millions of dollars in investment banking fees.
State securities regulators said in a lawsuit that CSFB used its investment banking arm to control research, contrary to its presumed role of independence. The structure resulted in undue influence on analysts to favorably rate companies with which CSFB had done or hoped to do investment banking business.
Secretary of the Commonwealth William Galvin, who filed the charges against CSFB, sought a $2 million fine.
"We want to assure the American people that the fix isn't in, that's what this is all about," Galvin told reporters. "The level here of deceit permeates the entire company."
In a civil complaint, Massachusetts regulators also sought an order requiring CSFB, a unit of Swiss-based Credit Suisse Group (CSGZn.VX), to separate investment banking from stock research.
The lawsuit also seeks to bar CSFB analysts from marketing the bank's investment banking services and to bar analysts from covering any company for which CSFB provided investment banking services within a year. It also seeks to separate investment banking from the allocation of initial public offerings.
Galvin said Massachusetts filed the complaint because the U.S. Securities and Exchange Commission had failed to do so.
"We act today because the SEC has failed to act," he said at the Massachusetts Statehouse in Boston, where a news conference that was called to announce the lawsuit.
In a statement late on Monday, CSFB blasted Galvin's move and said allegations by his office are "riddled with misleading statements and inaccuracies."
The firm said it is committed to reform efforts and warned that Galvin's initiative could undermine progress toward an industrywide solution. |
