£70m fine forces CSFB rethink

CREDIT Suisse First Boston is understood to have agreed to sweeping reforms in the way it allocates stock in international share offers. The changes emerged after US regulators levied a $100m (£70m) fine against CSFB, following an 18-month investigation into its handling of equity deals.

The inquiry centred on whether CSFB favoured certain investors at the height of the technology boom by allocating stock to them in return for a cut of the profits they made from selling the shares in a rising market. CSFB is thought to have earned around $700m during the hi-tech boom, far outstripping rival banks.

It has now apparently agreed to new policies and procedures for popular equity offerings. A new committee of CSFB capital market executives is expected to be set up to monitor share allocations and the commissions paid by investors will also be reviewed.

The changes may be extended to other investment banks under new guidelines being drawn up by US regulator, the Securities and Exchange Commission. Institutions and private investors have complained about their treatment by certain US firms during the tech boom.