Iowa Division Receives $4,375,000 in Penalties

April 6, 2004

A final payment of $750,000 was received by Craig Goettsch, superintendent of securities at the Iowa Insurance Division, this
week, as 10 Wall Street brokerage firms have now paid almost four and a half million dollars in the past year to settle allegations of conflict of interest and supervisory failure by Wall Street brokerage firms.

The allegations stated that the companies failed to separate their investment banking business from their retail business and unreasonably hyped and improperly distributed initial public

The firms involved and their penalties paid to Iowa:

*Bear Stearns and Co. Inc. $250,000
*Credit Suisse First Boston, LLC $750,000
*Goldman, Sachs & Co $250,000
*Lehman Brothers, Inc $250,000
*J.P. Morgan Securities, Inc. $250,000
*Merrill Lynch, Pierce, Fenner & Smith, Inc. $500,000
*Morgan Stanley & Co. Inc. $250,000
*U.S. Bancorp Piper Jaffray $125,000
*Citigroup Global Markets, Inc. f/k/a Salomon Smith Barney $1,500,000
*UBS Warburg LLC $250,000

Goettsch said, “The payments are penalties for violations of the Iowa Uniform Securities Act and are deposited to the state’s general fund. Investors who feel that they were individually injured should seek arbitration through the National Association of Securities Dealers or the New York Stock Exchange.”

As part of a national settlement between these 10 firms and the federal and state regulators, the firms will also pay $30,000,000 to the Investor Protection Trust, an independent organization, to fund investor/consumer education and initiatives. Qualifying organizations in Iowa will receive a total of $300,000 from the IPT for that purpose.

Was this article valuable?

Here are more articles you may enjoy.