The brokerage unit of Germany's Deutsche Bank last night agreed to pay an $87.5m fine to settle charges that its equity research was improperly influenced by the firm's investment banking unit.
The Securities and Exchange Commission announced the settlement with New York-based Deutsche Bank Securities and a similar deal with Thomas Weisel Partners, which agreed to a $12.5m settlement.
The SEC said Deutsche Bank Securities would pay $25m in 'disgorgement' of profits from the conflict of interest, $25m as a penalty, $25m to fund independent research, $5m to fund investor education, and $7.5m for failing to cooperate with investigators.
The agency alleged that the two Wall Street firms 'issued research reports that were not based on principles of fair dealing and good faith and did not provide a sound basis for evaluating facts, contained exaggerated or unwarranted claims about the covered companies.'
The action marked the latest crackdown against Wall Street firms that issued allegedly biased research to help their investment banking divisions underwriting stock offerings for the same firms.
