SEC Investigation Into Wall Street Firms Far From Over, Reports Reveal

by Mike Godfrey, for LawAndTax-News.com, Washington

01 May 2003

Following the recent announcement that ten of the United States' leading investment banks are to pay out some $1.4 billion in a settlement over allegations of biased reporting and inaccurate research, the US Securities and Exchange Commission (SEC) has revealed that its investigation has now been extended to the firms which are accused of colluding with the analysts, offering valuable banking business in return for favourable research reports.

Speaking to the Times newspaper this week, an unnamed SEC source explained that:

'The clients of the investment banks are just as much in the spotlight as the banks themselves. Our investigation is by no means finished at this point.'

An official spokesman was more reticent, but revealed that: 'We continue to look into matters related to this global settlement.'

Meanwhile, observers have suggested that despite the $1.4 billion settlement, the deal reached between the SEC and the ten investment banks may open the floodgates for a wave of securities litigation, as the global settlement deal allows investigators to share with private attorneys the evidence which was collected as a result of the investigation.

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