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CSFB set to pay $100m fine over dotcom IPOs
Lawsuits still outstanding
Credit Suisse First Boston (CSFB) is preparing to pay a record $100 million (£70 million) fine to the Wall Street watchdog Securities and Exchange Commission (SEC) for breaking the rules during the dotcom boom.
The SEC has completed an 18-month investigation into all the main Wall Street banks over allegations of profiteering when Internet companies were floated.
Among the allegations are that banks demanded an inflated commission from investors to allow them to buy in Internet stocks; that only those people that agreed to buy more shares after the flotation - keeping the price up - were allocated stock; and that analysts were allowed to buy shares in the company they were floating at a discount.
CSFB has refused to comment on the huge fine but just about every business hack in New York has got the same information, so it looks like a certainty. In the settlement, CSFB won't admit to any wrongdoing or comment on any of the dodgy practices which saw it sack three brokers in June.
However, while this will be one of the biggest ever fines paid to the SEC, CSFB is still in line to pay out hundreds of millions more thanks to over 1,000 lawsuits filed by angry investors who claim the float process was corrupt. They are demanding billions of dollars. ®