Payments
for IPO Research_______________________________________________
Larger
companies are not immune from 17(b) violations. In a series of cases
that were brought after the Internet boom, the SEC charged several
large firms with receiving payments for research reports on IPO
stocks underwritten by other broker-dealers and not disclosing them
as required by 17(b). The firms charged included Deutsche Bank
Securities, Morgan Keegan, and Janney Montgomery. The payments were
in the hundreds of thousands of dollars.
In
these cases, the underwriters were apparently willing to pay hundreds
of thousands of dollars to support their IPO underwritings in the
after market.
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