(October 3, 2002) – Today the Securities and Exchange Commission, the New York State Attorney General’s Office, the New York Stock Exchange, the NASD and the North American Securities Administrators Association announced a joint effort to bring to a speedy and coordinated conclusion the various investigations concerning analyst research and IPO allocations. The undertaking is also designed to continue the process of formulating additional rules and regulations in these areas. Swift and appropriate resolution of these investigations will protect investors, facilitate the implementation of immediate and meaningful changes in research analyst and IPO allocation practices, and help enhance investor confidence in the marketplace.
The participating regulatory entities will endeavor in the next few weeks, based on the evidence they have compiled and input from interested parties, to formulate a common plan to address conflict-of-interest and other issues pertaining to research analysts and IPO allocations. This plan will then be used as a template to structure appropriate settlements with the companies that are currently under investigation and/or provide a sound basis for proposing industry-wide rules and regulations (including structural reforms) that will be used to govern in these areas. The parties believe that by addressing the research analyst and IPO allocation issues in a joint and unified manner, not only will brokerage firms have an opportunity to effect needed changes, but such changes will be made in a rational and principled manner.
The regulators intend to present proposed resolutions to the companies under investigation, and anticipate giving the companies a brief opportunity to work out and enter into final settlements. The regulators intend to continue their investigations, as appropriate, as to non-settling companies. The Chairman of the SEC and the New York Attorney General stressed their desire to bring about appropriate reforms in these areas based upon a common vision of protecting individual investors and the national markets.
According to Chairman Harvey Pitt: “The SEC, in conjunction with the New York Attorney General, the SROs, and NASAA, looks forward to moving quickly to a comprehensive resolution of these important matters – a resolution that is designed, first and foremost, to protect investors.”
Added Attorney General Eliot Spitzer: “This is an important step towards bringing closure and resolution to the critical issues we have been working on. Restoring market confidence and protecting investors are, of course, our top priorities.”
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New York Attorney General – Juanita Scarlett 212-416-8060
SEC – Christi Harlan 202-942-0020