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No criminal charges for CSFB in IPO inquiry

Good news for Credit Suisse Keystone Archive

Authorities in the United States have decided not to prosecute Credit Suisse First Boston after investigating its initial public offerings.

This content was published on November 29, 2001 - 11:15

The US attorney's office in Manhattan, the Securities and Exchange Commission and the National Association of Securities Dealers have been looking at potential abuses in how IPO shares were allocated during the tech sector boom at the end of the nineties.

In a statement, CSFB welcomed the announcement. It said CSFB "is pleased that the US attorney's office has decided to close its investigation of CSFB's IPO allocation practices without filing any charges."

But CSFB, still recovering from a rap on the knuckles from Japanese authorities for helping corporate clients there mask losses, could still face civil suits and remains under investigation by the Securities and Exchange Commission.

Credit Suisse said in a regulatory filing in September that inquiries related to CSFB focussed on two IPOs, including one for VA Linux, a softare specialist whose stock rocketed on their launch in December 1999.

IPOs were regularly scoring double or triple-digit first-day gains at the time and investors could make huge gains by securing a good stock allocation.

Credit Suisse named Wall Street veteran, John Mack, as head of its investment banking arm in July, giving him the task of reorganising the unit. He has since announced plans to axe 2,000 jobs as part of a drive to cut costs by a £1 billion by the end of next year.

swissinfo with agencies

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