Groklaw: IBM’s Subpoenas to Analysts and Investors: Why? Why? Why?

“On October 31, 2003, the SEC announced a settlement of
enforcement actions involving conflicts of interest between
brokerage firm analysts and investment banks:

“‘The Securities and Exchange Commission announced today that
the Honorable William H. Pauley III, United States District Judge
for the Southern District of New York, approved the $1.4 billion
global settlement of enforcement actions against ten of the
nation’s top investment firms and two associated individuals. The
enforcement actions alleged undue influence of investment banking
interests on securities research at brokerage firms. The
enforcement actions and the proposed settlements were announced on
April 28, 2003… The Court also entered separate Final Judgments
as to each of the 12 defendants.

“Under the terms of the Final Judgments and Orders that Judge
Pauley approved today, the ten firms and two individuals will pay a
total of $894 million in penalties and disgorgement, consisting of
$397 million in disgorgement and $497 million in penalties, which
includes one firm’s previous payment of $100 million in connection
with its prior settlement with the states…”

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