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IPO probe widens
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December 13, 2000: 2:02 p.m. ET
SEC issues subpoenas to Bear Stearns, Goldman Sachs, MSDW
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NEW YORK (CNNfn) - The Securities and Exchange Commission recently subpoenaed information from investment banks Bear Stearns, Goldman Sachs, and Morgan Stanley Dean Witter as part of an ongoing investigation into whether U.S. brokerage houses give preferential treatment to favored clients on hot initial public offerings.
A spokesman for Bear Stearns and a spokeswoman for Goldman Sachs Wednesday confirmed the SEC's request and said their respective companies are cooperating.
Morgan Stanley also received a request, CNNfn has learned.
According to the Wall Street Journal, which first reported the investigation, the SEC is looking into how Wall Street firms allocate shares in hot IPOs.
The commission said it does not comment on ongoing investigations.
According to the paper, the New York office of the SEC issued subpoenas to the three firms, asking them to provide, by Monday, records of certain trades from 1999 and 2000 as well as lists of which investors got shares in IPOs led by the firms during that time.
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 PROBE STARTS WITH LETTER
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The current probe was launched after the SEC received an unsigned letter this summer which sketched out potential IPO-allocation abuses at Credit Suisse First Boston, an insider told the Journal.
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Merrill Lynch, the Salomon Smith Barney unit of Citigroup and Lehman Brothers Holdings are among firms on Wall Street that have not been contacted by the SEC, the paper said.
Merrill Lynch declined to comment on the matter.
The SEC and the U.S. attorney's office in Manhattan are investigating whether some investors paid out pricey stock-trading commissions in exchange for shares of hot IPOs, and whether payments of that sort constituted illegal kickbacks, the paper reported last week.
The current probe was launched after the SEC received an unsigned letter last summer that sketched out potential IPO-allocation abuses at Credit Suisse First Boston, an insider told the Journal.
Goldman Sachs Group (GS: Research, Estimates) stock rose $1.44 to $93.87 on the New York Stock Exchange, Morgan Stanley Dean Witter (MWD: Research, Estimates) rose 13 cents to $73.75, and Bear Stearns (BSC: Research, Estimates) lost $1.94 cents to $48.69. 
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