US financial regulators are demanding internal documentation - including e-mails - from a dozen Wall Street investment houses, as part of an ongoing probe into biased share research.
Subpoenas were sent to bank chiefs at the end of last week, demanding evidence of the fairness and independence in the way they recommend shares to investors.
The move follows a $1.4bn settlement in late April between regulators - including the Securities and Exchange Commission (SEC) and the National Association of Securities Dealers (NASD) - and 10 investment houses.
BREAKDOWN OF THE APRIL SETTLEMENT
Those 10 firms, which include Merrill Lynch, CSFB and Salomon Smith Barney, have been hit with subpoenas, reportedly as well as Deutsche Bank and San Francisco-based Thomas Weisel.
A spokesman from the SEC refused to comment on details of the investigation, but said that the settlement demanded a great deal of supervision of individual bankers and analysts.
The settlement was conclusive as far as companies were concerned, but left the door open for prosecution of individuals.
Tainted business
The SEC and NASD probe is being supported by the New York Stock Exchange, which is determined to erase the taint of a series of share-research scandals.
During the hi-tech boom of the 1990s, regulators say, some leading banks gave overly positive ratings to shares in client companies, with the aim of winning lucrative investment banking business.
In theory, investment banks are supposed to maintain impermeable "Chinese walls" between their share research and investment banking divisions, in order to ensure that their share tips are free of bias.
^ Back to top | BBC Sport Home | BBC Homepage | Contact us | Help | ©