The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Time to level the playing field

CSFB is also the chief suspect in a probe into IPO allocation processes by the Securities and Exchange Commission, one which could shake up the entire industry.


The SEC began its inquiry after receiving an anonymous letter from a buy-side firm, alleging that CSFB was tying allocations to higher commissions. Usually, investors pay five cents a share; allegedly CSFB, and others, have been charging up to $1 a share for select IPOs. The SEC is investigating CSFB but has asked other firms for all information on IPO allocations of 10,000 shares and above. Those firms include Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley Dean Witter and Salomon Smith Barney.


For investors these payments were the price of ensuring a sizeable allocation of an IPO. The frenzied popularity of tech stocks led the way. They were usually small-sized deals of under $1 billion, if not under $500 million, and a large number of deals doubled on the first day. In the past, bankers would try to price in a 10% to 15% first-day increase to keep investors happy - and to boost trading profits, which in itself might be worth investigating.



You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree