Opinion
No. 02 CV 0090
January 29, 2002
FINAL JUDGMENT OF PERMANENT INJUNCTION AND OTHER RELIEF AGAINST CREDIT SUISSE FIRST BOSTON CORPORATION
Plaintiff Securities and Exchange Commission (the "Commission"), having commenced this action on January 22, 2002 against Credit Suisse First Boston Corporation ("CSFB"), for injunctive and other equitable relief ("Complaint") charging CSFB with violations of Rules 2110 and 2330 of the NASD Conduct Rules, and Section 17(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. § 78q(a), and Rule 17a-3, 17 C.F.R. § 240.17a-3, thereunder; and defendant CSFB, having executed the Consent and Undertakings of Credit Suisse First Boston Corporation ("Consent"), which is annexed hereto, having admitted to the service of the Summons and Complaint on it, having admitted to the jurisdiction of this Court over it and over the subject mater of this action, having waived the entry of findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure, and without admitting or denying the allegations of the Commission's Complaint (except as to jurisdiction, which are admitted), and having consented to the entry, of this Final Judgment of Permanent Injunction And Other Equitable Relief By Consent Against Credit Suisse First Boston Corporation ("Final Judgment"); without further notice:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that CSFB, directly or through its officers, directors, agents and employees, is hereby permanently enjoined and restrained, directly or indirectly, from engaging in acts, practices, transactions or policies that constitute unjust or inequitable conduct toward customers of CSFB, by sharing profits of CSFB customers in exchange for allocations of shares in Initial Public Offerings underwritten by CSFB, in whole or in part, in violation of Rule. 2110 of the NASD Conduct Rides.
II.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that CSFB, directly or through its officers, directors, agents and employees, is hereby permanently enjoined and restrained, directly or indirectly, from sharing in the profits or losses in any account of a customer, except as maybe permitted by NASD Conduct Rule 2330, New York Stock Exchange Rule 352 or rules of other Self Regulatory Organizations, by engaging in acts, practices or transactions to obtain improper payments from customers in exchange for allocations of shares in Initial Public Offerings underwritten by CSFB, in whole or in part, in violation of Rule 2330 of the NASD Conduct Rules.
III.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that CSFB, directly or through its officers, directors, agents, servants and employees is hereby permanently restrained and enjoined, directly or indirectly, from violating Section 17(a)(1) of the Exchange Act) 15 U.S.C. § 78q(a)(1), and Rule 17a-3 thereunder, 17 C.F.R. § 240. 17a-3, by failing to make and keep for prescribed periods such records, to furnish such copies thereof, and to make, disseminate and file the reports required by such section and the rules thereunder, which set forth requirements concerning records and reports required to be made and preserved by certain exchange members, brokers and dealers.
IV.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, CSFB, shall pay $70 million, representing disgorgement of monies obtained improperly by CSFB as a result of the conduct alleged in the Complaint, provided, however, that the foregoing payment obligation shall be reduced by any amounts paid by CSFB pursuant to its agreement to pay disgorgement to NASD Regulation, Inc. ("NASDR") in a related proceeding.
V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that payment of the disgorgement shall be made to the U.S. Treasury. Such Order is based on the, Commission's determination, in light of the violations of NASD Conduct Rules 2110 and 2330, and Section 17(a) of the Exchange Act and Rule 17a-3 thereunder, as alleged in the Complaint, that the disgorgement funds should not be distributed to any third parties, and that payment of such funds to the Treasury is appropriate and in the public interest. Such payment shall be: (A) nude within thirty days of the entry of this Final Judgment by wire transfer, United States postal money order, certified check, bank cashier's check or bank money order; (B) made payable to the Securities and Exchange Commission; (C) hand-delivered or mailed to the Comptroller, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Alexandria, Stop 0-3, VA 22312; and (D) submitted under cover letter that identifies the defendant, the name and civil action number of this litigation, and the court in which it was brought. The cover letter also shall contain the investigation name ( In the Matter of Certain IPO Allocations) and the case number assigned by the Commission staff (NY-6752), and shall identify the payment as payment of disgorgement. A copy of the cover letter and of any wire transfer instructions, money orders or checks, front and back, shall be transmitted simultaneously to Caren Nelson Pennington, Esq., Securities and Exchange Commission, 233 Broadway, New York, New York 10279.
VI.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that CSFB shall pay a civil penalty of $30 million pursuant to Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3), provided, however, that the foregoing payment obligation shall be reduced by any amounts paid by CSFB pursuant to its agreement to pay a penalty to NASDR in a related proceeding.
VII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the payment of the civil penalty described in Paragraph VI shall be made within thirty days of the entry of this Final Judgment by wire transfer, U.S. postal money order, certified check, bank cashier's check, or bank money order payable to the order of the "United States Securities and Exchange Commission." This payment shall be transmitted to the Comptroller, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, under cover of a letter that identifies the defendant, the name and civil action number of this litigation, and the court in which it was brought. The cover letter also shall contain the investigation name ( In the Matter of Certain IPO Allocations) and the case number assigned by the Commission staff (NY-6752), and shall identify the payment as a civil penalty under Section 21(d)(3) of the Exchange Act. A copy of the cover letter and of any wire transfer instructions, money orders or checks, front and back, shall be transmitted simultaneously to Caren Nelson Pennington, Esq., Securities and Exchange Commission, 233 Broadway, New York, New York 10279.
VIII.
IT IS FURTHER ORDERED that the attached Consent be, and hereby is, incorporated herein with the same force and effect as if fully set forth herein.IX.
IT IS FURTHER ORDERED that CSFB shall comply with the undertakings set forth in the attached Consent.
X.
IT IS FURTHER ORDERED that the Court shall retain jurisdiction of this matter for all purposes, including, but not limited to, implementing and enforcing the terms and conditions of this Final Judgment.
XI.
IT IS FURTHER ORDERED that the Court expressly determines that there is no just reason for delay in the entry of this Final Judgment. The Clerk of the Court is hereby directed pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, to enter this Final Judgment forthwith.
XII.
IT IS FURTHER ORDERED that pursuant to Rule 65(d) of the Federal Rules of Civil Procedure, this Final Judgment is binding upon defendant CSFB, its officers, agents, servants, employees, and attorneys-in-fact, and upon those persons in active concert or participation with them who receive actual notice of this Final Judgment by personal service or otherwise.