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CSFB confirms settlement

CSFB will change the way it goes about share launches Keystone Archive

Investment bank Credit Suisse First Boston (CSFB) has confirmed a $100 million (SFr166 million) United States legal settlement for alleged malpractices on the stock market.

CSFB said in a press release on Tuesday, it had signed an agreement with the US Securities and Exchange Commission (SEC) and the National Association of Securities Dealers (NASD) to implement revised procedures governing the allocation of new stock issues.

The bank – a unit of Switzerland’s Credit Suisse Group – was amongst a number of investment banks under scrutiny for allegedly mishandling stock offerings between April 1999 and June 2000.

The investigations, which took more than one year, focused on whether banks required rich customers to buy more IPO shares on the first day of trading to guarantee a jump in the stock price.

In its statement, CSFB emphasised that by agreeing to this settlement it neither rejected nor admitted to the allegations.

CSFB chief executive officer, John Mack, said he was relieved the matter was finally settled, however, he pointed out the investment bank had never been accused of fraud.

The settlement covers a $30 million (SFr50 million) fine, which will be split between the SEC and NASD, and $70 million (SFr117 million) payment to the US treasury and NASD.

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