Morgan, Others Settle IPO Abuse Allegations
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Investment bank Morgan Stanley will pay $2.7 million to settle allegations that it broke rules limiting the sale of stock after initial public offerings, brokerages regulator NASD said Thursday.
In another case of alleged IPO abuse on Wall Street, the NASD said it also fined Goldman Sachs Group $125,000, and JPMorgan Chase & Co. $150,000 for similar violations involving lock-up rules that restrict firms and affiliates from selling certain securities for quick profits after IPOs.
The NASD said it censured all three firms. Morgan Stanley agreed to pay a fine of $150,000 and to disgorge more than $2.5 million in ill-gotten profit, the regulator said.
Morgan Stanley affiliates sold shares in Breakaway Solutions and AsiaInfo Holdings Inc. before lock-up periods expired, while five people related to Goldman employees similarly sold shares in PlanetRx.com Inc., said the NASD, formerly the National Assn. of Securities Dealers.
The NASD action against JPMorgan concerned sales by an affiliate of Hambrecht & Quist, which JPMorgan acquired a few years ago, in shares of PlanetRx.com, Coolsavings.com, Net2Phone Inc. and Liberate Technologies Inc. , the regulator said.
All three firms settled without admitting or denying wrongdoing, the NASD said. Spokesmen for the three firms declined to comment.
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