According to a report in the Wall Street Journal this week, investment banks Goldman Sachs and Morgan Stanley have reached a provisional settlement agreement with the US Securities and Exchange Commission over "laddering" allegations related to the allocation of shares in popular IPOs during the stock market bubble.
The SEC has for several years been investigating whether the firms in question improperly linked the allocation of shares in 'hot' initial public offerings to commitments made by investors to buy additional shares at higher prices once the stocks began trading, a process known as "laddering".
Citing unnamed sources close to the investigation, the WSJ revealed that each firm has agreed to pay $40,000 in order to settle the allegations, going on to add that although Goldman has agreed to the language of its settlement accord, the process is not so far along with Morgan Stanley.
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