Who Next In Wall Street Probe ?

10 years ago

Merrill Lynch has now paid $100m to settle charges of issuing biased research to investors. US State regulators and attorneys general are now thought to be gearing up to undertake separate inquiries into the same issues at most of the other Wall Street firms.

The Wall Street Journal reports that US state securities regulators are now to use the Merrill settlement as a blueprint for more financial settlements from the other major firms.

US state officials have even agreed to split the work among themselves in order to make the investigations more effective. New York state attorney general Eliot Spitzer, fresh from his Merrill triumph, will focus on Salomon Smith Barney and Morgan Stanley. Massachusetts will take Credit Suisse First Boston and Connecticut will concentrate on UBS Paine Webber. Texas and Alabama have teamed up to take on Lehman and JP Morgan, New Jersey has Bear Stearns and California Deutsche Bank. Utah is responsible for the Goldman Sachs probe.

It remains unclear exactly how any settlement funds will be distributed among the states. In the Merrill case, 52% went to New York, with the remainder being divided amongst the 49 other states.

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