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Credit Suisse First Boston Fined $100 Million

Posted by ryuzaki0 on from the all-fun-and-games-until-someone-gets-an-eye-put-out dept.

A couple of people wrote in to note that Credit Suisse First Boston, which was the underwriter for VA Linux ? ' IPO, has been fined $100 million for actions they took in that and other high-tech IPO's during the stock market boom. CSFB allocated shares of certain IPO's to customers who made kickbacks to CSFB. Here's their side of the story. There's also an additional statement by the regulators and CSFB's settlement agreement (PDF).

4 of 178 comments (clear)

  1. GASP! by ekrout · · Score: 5, Funny

    GASP! Now they're only worth $20 trillion.

    --

    If you celebrate Xmas, befriend me (538
  2. The chickens are coming home to roost. by mrsam · · Score: 5, Interesting

    I wouldn't be surprised if a few other brokerages will get nailed pretty soon, for similar kinds of shennanigans. Disclaimer: I have no direct knowledge of any regulatory investigation of ETrade, but we all know that they pretty much played the same games with RHAT.

    At least with CSFB did in fact give a handful of shares to everyone who applied for the friends-in-family deal - AFAIK - while ETrade tried to come up with every excuse in the book to kick out as many people as they could in their friends-and-family program. Although some of us did eventually get our pound of flesh (see my website: E*Trouble to revisit those exciting times) it would be icing on the cake to see EGRP whacked on the balls, again.

  3. Re:Not Funny... by Anonymous Coward · · Score: 5, Funny

    VA Linux, which, if you're like me, you have your retirement savings invested in

    I have this strange urge to laugh and cry at the same time...

  4. Wall Street Shenanigans by solman · · Score: 5, Informative

    The extraordinary thing about this is how lightly CSFB (and the street as a whole) is getting off. The profits from inappropriate IPO allocations alone substantially exceeded the penalties.

    No penalties will ever be assessed against the hundreds of analysts who hyped internet stocks in exchange for those companies giving their firms a slice of the investment banking business.

    Ask any analyst from any wall street firm, sell side or buy side, and they will tell you that everybody does this. Compare the SEC's treatment of big firms doing outwardly crooked things to their treatment of the little guy.

    It looks like they're too busy busting 15-year olds to attack the real stock manipulators.