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| 2002 News and Press Releases |
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HEADLINE ARCHIVED:
Regulators, Firms May Deal Soon
By: Staff Writer
Newsday (New York, NY). December 19, 2002
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EXCERPT: Regulators and Wall Street firms could announce details today of a so-called global settlement to resolve investigations that analysts at brokerage firms provided biased research, sources said yesterday. One sticking point in the final discussions is understood to be the litigation Massachusetts is pursuing against Credit Suisse First Boston. However, officials from the state say they hope to sign on to the settlement, which would end that lawsuit as well. "We are absolutely committed to being part of the global resolution," said Matt Nestor, director, Massachusetts securities division. "We are working toward a tough but fair settlement to what we think are egregious violations." Regulators and the 10 firms involved in the discussions have been going back and forth on the level of fines to be imposed. Many of the brokerage houses had asked for a lowering of the proposed penalties, but sources said the fines are inching back up to the $50 million range for several midsized firms - levels regulators had asked for initially. "The regulators don't want to go below a certain point," said one source familiar with the talks. Other firms such as Citigroup may have to pay as much as $350 million to settle charges, largely because former telecommunications analyst Jack Grubman has been accused of changing recommendations on AT&T Corp. at the behest of Citigroup's chief executive Sandy Weill. Weill in a note several months ago admitted that he suggested that Grubman "take a fresh look" at his low rating of AT&T but denies reports that he forced Grubman to make any changes. A spokesman for New York Attorney General Eliot Spitzer declined to comment on a Wall Street Journal story report that said Weill is expected to avoid facing separate charges for trying to influence analyst ratings.
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