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CSFB to settle probe
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December 11, 2001: 12:52 p.m. ET
CSFB in talks to pay $100 million but bank won't admit guilt or face criminal charges.
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NEW YORK (CNN/Money) - Credit Suisse First Boston is in talks to pay $100 million and resolve a federal probe into the way the investment bank issued shares in hot stock offerings, sources familiar with the situation told CNN/Money.
CSFB will not be charged with fraud and the U.S. Attorneys Office in Manhattan will not file criminal charges against the firm, a person with knowledge of the matter said.
Instead, the settlement could include charging the underwriter with improperly sharing in IPO profits and some bookkeeping irregularities, a source said. But CSFB would neither admit nor deny guilt as part of the settlement, the person said.
However, nothing definitive has been agreed to between CSFB and the various agencies, another person with knowledge of the matter said.
The U.S. Attorney's Office in Manhattan, the Securities and Exchange Commission and the regulatory unit of the National Association of Securities Dealers were all part of the investigation. In late November, CSFB said that the U.S. Attorney's had dropped its probe into the bank.
Both the SEC and CSFB declined comment. The NASD could not be reached for comment.
The settlement -- details of which are being negotiated -- was expected to be announced close to the end of the year, the Wall Street Journal reported Tuesday.
The planned agreement stemmed from an 18-month probe into whether the investment banking unit of Credit Suisse Group, Switzerland's second-largest bank, gave favored investors larger shares of initial public offering stocks during the heady tech boom of the late 1990s and early 2000.
In exchange, these clients allegedly kicked back part of their quick profits on IPOs to CSFB, in the form of inflated commissions on other stock trades.
CSFB, a top underwriter of technology-based IPOs, served as lead bookrunner on various "hot" IPOs including the offering from VA Linux. In December 1999, software specialist VA Linux set a record for IPO debuts when its shares opened at nearly 10 times their $30 offer price and closed their first day at $239.25, up nearly 700 percent.
In June, CSFB fired three brokers from its technology group in June for violating firm policy. 
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