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David Weisberger
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Stop the BS & Promote Real Transparency!

In this shared blog, David Weisberger says a recent WSJ article is wrong and that traders do need to purchase faster and more comprehensive market data to avoid being fined for violating "Best Execution" obligations.

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June 30, 2001

Credit Suisse in Hot IPO Dispute

By Gregory Bresiger

Credit Suisse First Boston, in a 121- page filing with securities regulators, denies that it violated any rules in taking commissions from investors who received hot IPO shares. Regulators are investigating if there were excessive markups in the firm's IPO sales.

"There is absolutely nothing written in any guideline, rule, regulation, case or regulatory official that forbids voluntary payment by clients of large commissions," Credit Suisse wrote in a filing. The firm said that it didn't violate an industry rule requiring that IPO fees not exceed five percent of a transaction's value.

NASDR, the regulatory arm of the National Association of Securities Dealers, recently notified Credit Suisse that at least six of its employees could face administrative charges because of possible rules violations. Neither the NASD nor Credit Suisse would provide comment.

However, the NASD and the Securities and Exchange Commission are investigating how firms allocate popular IPO shares. Congress is also going to investigate the issue, which has been the subject of frequent complaints by smaller retail investors who say they are shut out of big moneymaking opportunities.

But Credit Suisse, in its filing, said that, "the practice of rewarding better customers is neither new or unknown in the investing public." And the firm also quoted former SEC Chairman Arthur Levitt, in a speech on IPOs last November before the Securities Industry Association, who said, "those clients that direct the most brokerage business to investment banks are more likely to be rewarded."