To: KeepItSimple who wrote (94416 ) 5/1/2001 9:54:26 PM From: SpongeBrain Respond to of 436258 More at a Wall Street Firm Are Investigated on I.P.O.'snytimes.com everal more employees of Credit Suisse First Boston are under investigation in a broad federal inquiry into how Wall Street investment banks doled out shares in offerings of new stocks, according to regulatory filings and people inside and outside the firm. The filings show that the federal investigation into how initial public offerings were sold at the height of the technology stock boom in the late 1990's extends to First Boston's New York headquarters. Among the New York-based employees who have disclosed that they are subjects of an investigation are Andrew S. Benjamin, a managing director in the firm's private client services division, which provides brokerage services to wealthy individuals. A document filed with the National Association of Securities Dealers indicates that Mr. Benjamin was notified in late March that he was a subject of an investigation that could lead to disciplinary action. It says that Mr. Benjamin denies any wrongdoing. Mr. Benjamin could not be reached for comment. Victoria Harmon, a spokeswoman for First Boston, declined to comment, citing the firm's policy of not discussing internal matters involving employees. The latest disclosures came after First Boston placed three employees from the technology unit's brokerage operation on leave earlier this year. Those three were the group's most senior executive, John Schmidt, and two people who worked for him, Michael Grunwald and Richard S. Bushley. Reached at his home in San Francisco, Mr. Bushley declined to comment and referred questions to his lawyer, William Goodman. Mr. Goodman declined to answer questions. Securities regulators and prosecutors have been gathering information from investment banks and their customers to determine whether underwriters extracted kickbacks of trading profits or promises of follow- up purchases in exchange for shares of sought-after initial public offerings. In a criminal investigation into kickbacks, the Securities and Exchange Commission and the Justice Department have sent subpoenas to several investment banks seeking sales and trading records. The commission also has requested records on trading of new stocks from Morgan Stanley Dean Witter, J. P. Morgan Chase and Goldman Sachs in an informal inquiry into whether underwriters illegally tied initial offering allocations to subsequent purchases of the same stocks. Investigators have been particularly interested in First Boston and its technology investment banking group, based in Palo Alto, Calif., and overseen by the celebrated deal maker Frank Quattrone. Mr. Quattrone's operation was a leading underwriter of new technology and Internet stocks in recent years and it propelled First Boston from an also- ran to a top-tier firm on Wall Street.