Credit Suisse Fraud
 |
Learn about Credit Suisse fraud lawsuits and securities fraud! |
| Home |
| Credit Suisse Fraud information |
| Credit Suisse Fraud attorneys |
| Credit Suisse Fraud Resources |
| Contact Us |
| About Credit Suisse Fraud InfoCenter |
| Credit Suisse Fraud InfoCenter is an Internet resource that offers you an opportunity to research securities fraud and your legal rights associated with brokerage fraud. Credit Suisse Fraud InfoCenter does not offer legal advice or referrals. |
| Credit Suisse Fraud Information |
Credit Suisse First Boston InformationCredit Suisse First Boston (CSFB) is the New York investment arm of Swiss-based Credit Suisse Group. It became one of Wall Street’s most prolific underwriters during the late 1990s. Investment banker Frank Quattrone, head of CSFB’s Palo Alto-based global technology division, accounted for much of that success. Thanks to Quattrone, CSFB brought public such huge companies as Amazon. However, the new millennium has brought allegations of fraudulent practices such as banker-analyst collaboration, ‘spinning’ IPOs, and destruction of emails. Why is CSFB accused of fraud? Credit Suisse First Boston’s troubles have been brought about by several alleged practices. According to published reports, Credit Suisse First Boston has a history of using its analyst advice to garner banking clients. Frank Quattrone, along with a second CSFB investment banker, allegedly ordered that the responsibility of analyzing a particular company be shifted from a skeptical analyst to a more favorable one. This collaboration between research and banking divisions has plagued more than one investment firm, and is one of the bases for the federal suit against numerous securities firms that is being led by New York Attorney General Eliot Spitzer. Investigators are trying to determine if CSFB’s books reveal that the company was involved in a process called laddering. In this technique, the investment firm sells a specific number of shares at a pre-market price with the off-the-record stipulation that the buyer later purchase a comparable amount of shares after they hit the market. The buyer makes a lot of money from the shares bought at the low price and usually stands to lose little on the after-market shares. However, the guaranteed sale of the shares after they go public inflates the stock price immensely. This makes laddering highly illegal, though it is regularly practiced. CFSB and Quattrone are also believed to have engaged in rampant ‘spinning’ of hot IPOs. In this practice, valued banking clients are allowed access to a hot new stock before it hits the market. The IPO’s value shoots up during its first day or two of trading, making a lot of money for the client. In return, the client – usually an executive at an important corporation – gives his company’s business to the investment firm. The investment firm usually charges exorbitant transaction fees to companies whose executives it has helped. Finally, Quattrone is believed to have destroyed and ordered the destruction of emails in violation of securities regulations. What is the current status? In January of 2002, CSFB settled a lawsuit filed by the SEC and NASD that alleged that the brokerage had been spinning stocks. CSFB paid $100 million in the settlement. In December 2002, Credit Suisse First Boston, along with a number of other investment firms, settled another suit filed by several government agencies. The suit, which charged that the firms issued tainted advice, totaled $1.4 billion between the twelve firms, of which CSFB paid $200 million. Quattrone currently faces criminal charges of obstruction of justice and witness tampering from the Manhattan U.S. Attorney’s office. The NASD has accused Quattrone of various corrupt behaviors, for which he may face penalties of fine, suspension, censure, or disbarment from the securities industry. In addition, he could be stripped of any gains he may have made from fraudulent transactions. Quattrone earned more than $200 million from 1998 through 2001 at CSFB. |