"Federal authorities investigating questionable ways Wall Street
dealers allocate hot initial public offerings of stock are focusing
on the IPO of VA Linux Systems, whose shares zoomed a record eight
times the offering price on its first trading day a year ago,
according to people familiar with the probe."
"The Securities and Exchange Commission and the U.S. attorney's
office in Manhattan have launched a joint investigation into
whether some investors paid unusually large stock-trading
commissions in exchange for allocations of IPOs that surged in
price on their first day of trading, and whether those payments
constituted illegal kickbacks."
"VA Linux, a vendor of personal-computer software in
Sunnyvale, Calif., was one of the hot deals underwritten by Credit
Suisse First Boston; the big Wall Street firm's deals have been an
early focus of the federal investigation, the people familiar with
the inquiry say. The Credit Suisse Group unit declined to
comment on any aspect of the VA Linux deal; it has confirmed
receiving inquiries about its IPO allocations, which it says were
in line with industry practice."
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