Banner: Maryland Attorney General J. Joseph Curran, Jr.
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For Immediate Release
April 28, 2003
Contact: Sean Caine, 410-576-6357

Historic Settlement Requires Brokerage Houses to pay Fines, Fund Independent Research and Investor Education

Attorney General J. Joseph Curran, Jr. announced today that under the terms of a settlement between securities regulators and Wall Street firms, Maryland stands to receive $6,325,552 upon final acceptance of the terms of the agreement. The settlements result from allegations of conflicts of interest at brokerage houses where analysts recommended stocks due to improper influence from their investment banking colleagues.

"The industry reforms agreed upon in this settlement will provide stronger protections for investors, " Attorney General Curran said. "It’s our hope that this settlement will change the way business is done on Wall Street and will result in the return of wary investors to our markets."

Under the terms of the settlement the firms also are required to distribute $30 million over a period of five years to the Investor Protection Trust. The money will be used to fund investor education initiatives on the state and national levels. The IPT is an established charitable organization with experience handling settlement funds and a history of investor education successes. Nearly half a million dollars will be earmarked for investor education programs in Maryland.

The North American Securities Administrators Association, Securities and Exchange Commission, NASD, New York Stock Exchange and state securities regulators announced the completion of the enforcement actions at a press conference at the SEC today, implementing the global settlement in principle reached and announced by regulators last December.

That settlement followed joint investigations by the regulators of allegations of undue influence of investment banking interests on securities research at brokerage firms, and the enforcement actions announced today track the provisions of the December global settlement in principle.

The 10 firms against which enforcement actions are being announced today are: Bear, Stearns & Co. Inc.; Credit Suisse First Boston, LLC; Goldman Sachs & Co.; Lehman Brothers, Inc.; J.P. Morgan Securities, Inc.; Merrill Lynch, Pierce, Fenner & Smith, Incorporated; Morgan Stanley & Co. Incorporated; Citigroup Global Markets Inc. f/k/a Salomon Smith Barney, Inc.; UBS Warburg LLC; U.S. Bancorp Piper Jaffray Inc.

"Maryland is committed to the settlements negotiated by the lead states and unanimously recommended by the NASAA Board of Directors. I am optimistic that our Securities Division’s review of the settlement will confirm that the interests of our residents are well served by this settlement," Curran added.



Attorney General of Maryland 1 (888) 743-0023 toll-free / TDD: (410) 576-6372
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