Regulators levied a $28 million fine against Robertson Stephens for charging illegally high commissions on initial public offerings during the bull market years.
Separately, the Securities and Exchange Commission filed a civil action against Paul Johnson, 42, a former managing director and senior research analyst at Robertson Stephens, for issuing fraudulent research reports on companies that went public during the Nasdaq bubble.
It is believed to be the SEC’s first suit against a stock analyst for issuing misleading research.
The SEC is attempting to force Johnson to pay back gains from selling stock in the companies he allegedly dumped, but it did not specify a dollar amount in its release.
Robertson Stephens, the investment bank known for its high flying tech IPOs, was shuttered last year by FleetBoston Financial (FBF: news, chart, profile).
Nancy Condon, spokeswoman for the National Association of Broker Dealers, said FleetBoston will have to pay the fine.
Robertson Stephens consented to the entry of the order against it without admitting or denying the findings contained in the order, the SEC said.
A FleetBoston spokeswoman said the bank suggested a settlement during negotiations with the SEC in October and that the bank is “pleased to get the matter behind us.”
The $28 million cost of the settlement was included in a charge taken in the second quarter of 2002 for the closure of Robertson Stephens, she said.
Johnson had worked for Robertson, but was never part of the FleetBoston staff, she said.
The NASD accused Robertson Stephens of receiving inflated commissions from more than 100 clients in exchange for allocations of “hot” initial public offerings in 1999 and 2000 when the bank managed 75 deals.
“Hundreds of these trades were executed with commissions at $1 per share or more, in contrast to the ordinary rate for such transactions — 6 cents per share,” the NASD said in a statement.
CS First Boston (CSR: news, chart, profile) was forced to pay a $100 million fine by the NASD late last year. See full story.
It was the first in a series of paybacks by banks last year in the face of conflict of interest probes on Wall Street. The moves culminated in a $1.4 billion fine announced last month.