SEC Cites CSFB E-Mail in Probe
The Securities and Exchange Commission, in documents detailing the settlement with Credit Suisse First Boston over alleged IPO abuses, cited e-mail messages between CSFB employees to support the contention that the firm broke the rules. Some excerpts:
“OK, we got another screaming deal and I weaseled you guys some stock,” a salesman told a customer, according to the SEC. “We’ve yet to see any leverage out of you guys for the free dough-re-me. Does it make sense for me to continue to feed your guys with deal stock? Or should I take the stock to someone who will pay us direct for the allocation?”
A CSFB senior manager tells another senior manager what would happen if part of an investor’s profit from an IPO stock’s expected immediate surge isn’t paid to CSFB: “Either [client] pays us, or he gets [expletive] nothing.”
The recipient responds: “Agreed.”
CSFB employees who work on the “syndicate” desk responsible for allocating IPO shares told colleagues that clients should get IPO shares only if they agree to do other trades, generating commissions: “If you are thinking of allocating shares to some of the smaller accounts, then there should be an opportunity to write almost instantaneous tickets on the secondary side; i.e., this is not a charity!!!”
Some CSFB brokers, such as those who served wealthy executives at technology firms, required customers to pay back to the firm as much as 65% of their profits from IPOs, according to one e-mail.
