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| 2002 News and Press Releases |
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HEADLINE ARCHIVED:
Crucial Terms Still Unsettled In Settlement For Wall St.
By: Gretchen Morgenson
The New York Times. December 13, 2002
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EXCERPT: After two days of arduous meetings in New York, securities regulators and the biggest brokerage firms remain deeply at odds on the terms of a settlement of the investigations into Wall Street's conflict-tinged stock research, according to people involved in the negotiations. With another day of meetings scheduled for today, the sides will again try to reach agreement on two major sticking points: how much in fines each firm will pay under the settlement and which facts will be released by investigators to the public for use by investors wishing to bring their own private lawsuits against the firms. Basic agreement has been reached, participants said, on how brokerage firm research departments will operate, ensuring that analysts do not become salespeople for the firms' investment banking clients. "We have been delivering a message all week long that in order to get this global resolution done we need three things," said Christine A. Bruenn, president of the North American Securities Administrators Association and securities administrator for the state of Maine. "We need to change the way the firms do business," she said, "we need information for investors and we need significant penalties. Some of the firms are not ready to take those steps. My message on behalf of the states, and I think it represents the views of my federal regulatory colleagues, is if that doesn't happen we won't be able to settle with them. That means we'll have to continue and expand our investigations and prepare for litigation." On one side of the negotiating table are officials from the Securities and Exchange Commission, NASD, the New York Stock Exchange, the New York attorney general's office and the North American Securities Administrations Association, which represents state regulators. The state regulators appear to be applying the most pressure and to be intent on levying substantial fines on the firms. On the other side are representatives from 12 Wall Street firms, including Salomon Smith Barney, a unit of Citigroup; Credit Suisse First Boston; and Morgan Stanley. Complicating the negotiations is the fact that each firm is meeting with its adversaries separately, as is typical in an enforcement action.
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