Hawaii to get $337,500
from settlement
WASHINGTON >> Hawaii will receive more than $300,000 as part of two investment firms' agreements to pay a total of $100 million to settle conflict-of-interest allegations.
Deutsche Bank Securities agreed to pay $87.5 million to settle allegations that it issued stock research that was biased by its investment-banking business, regulators announced yesterday, as part of a crackdown on conflicts of interest on Wall Street.
A smaller investment firm, Thomas Weisel Partners, is paying $12.5 million in a similar settlement announced by the Securities and Exchange Commission, the New York Stock Exchange, the National Association of Securities Dealers and state securities regulators.
As part of the deal, Hawaii will receive $337,500 under the agreement, said state Department of Commerce and Consumer Affairs Director Mark Recktenwald. The money will be used to improve the department's investor and consumer education programs, he said.
"Today's settlements represent a significant step in our continuing efforts to ensure that investors are treated fairly and provided with objective research," Recktenwald said.
Deutsche Bank and Thomas Weisel are the last two firms in an industrywide settlement. Ten of Wall Street's biggest firms -- including Citigroup, Merrill Lynch and J.P. Morgan Chase -- agreed in April 2003 to pay a total of $1.4 billion following more than a year of investigations that found analysts misled investors with stock picks designed to win firms investment-banking business.
Like the 10 others, Deutsche Bank and Thomas Weisel also are being required to dramatically change the way they do business, including severing the troublesome links between analysts' stock research and the firms' investment-banking departments.
The delay of more than a year for the settlement with Deutsche Bank was caused by its failing to promptly turn over internal e-mails during the investigation, the regulators said.
