MINNEAPOLIS, April 28 /PRNewswire-FirstCall/ -- U.S. Bancorp Piper Jaffray
(Piper Jaffray) today announced that it has reached a final settlement in the
joint investigation by federal and state regulators into equity research and
its relationship to investment banking during the period from 1999 through
2001. Piper Jaffray had previously announced an agreement in principle with
regulators in December 2002.
The settlement is part of a broader global settlement involving several
other leading securities firms and the Securities and Exchange Commission
(SEC), the National Association of Securities Dealers (NASD), the New York
Stock Exchange (NYSE), the New York Attorney General and other state
"From the beginning, Piper Jaffray has cooperated with the regulators in
the investigation, and worked with them and the other involved firms in the
process of redefining the role of equity research and its relationship to
investment banking," said Andrew Duff, president and chief executive officer
of Piper Jaffray. "We take our role in protecting the integrity of the
marketplace seriously. Our industry is undergoing significant changes to the
regulatory structure aimed at restoring investor confidence. We strongly
support those reforms."
Predating this settlement, Piper Jaffray had instituted a number of its
own initiatives. These included:
-- The establishment of a new Research Oversight Committee to review the
overall research process for integrity, independence, objectivity and
analytical rigor, and to oversee coverage initiations, discontinuances
and rating changes.
-- Changes in the methods of evaluating and compensating research
-- A prohibition on analysts participating in the solicitation of
investment banking business.
-- A prohibition on analysts owning stocks of covered companies.
Additionally, Piper Jaffray's Research functions are now part of a
separate division reporting directly to the firm's CEO.
"We are committed to ensuring that our Research division operates with
independence and objectivity," said Duff.
The settlement, which is entered into without admitting or denying any of
the allegations or findings, calls for Piper Jaffray to pay $12.5 million as a
penalty, $12.5 million into a distribution fund and $7.5 million for the
procurement of independent research to be provided to investors. As part of
the settlement, Piper Jaffray and the other firms will implement various other
changes related to equity research and investment banking operations. The
firms also have agreed to a voluntary initiative under which shares of "hot"
IPOs will not be allocated to directors or executives of public companies.
About U.S. Bancorp Piper Jaffray
U.S. Bancorp Piper Jaffray, a subsidiary of Minneapolis-based U.S. Bancorp
(NYSE: USB), is a focused securities firm comprised of four divisions: Equity
Capital Markets, Fixed Income Capital Markets, Private Advisory Services and
Research. The firm provides a full range of investment products and services
to individuals, institutions and businesses and has over 124 offices in 25
states across the country. For more information on U.S. Bancorp Piper Jaffray,
visit www.piperjaffray.com .
This press release contains forward-looking statements. Statements that
are not historical or current facts, including statements about beliefs and
expectations, are forward-looking statements. These forward-looking
statements are subject to risks and uncertainties relating to the proposed
spin-off of the U.S. Bancorp Piper Jaffray business, including the impact of
the proposed spin-off on U.S. Bancorp's and the new company's results of
operations, the financial accounting consequences of the proposed transaction,
the impact of the spin-off on U.S. Bancorp's stock price and on its and the
new company's relationships with their respective customers and employees, the
tax consequences of the transaction to U.S. Bancorp, the new company and their
respective stockholders, changes in business climate or market conditions or
other factors which could make the proposed spin-off unadvisable. These
forward-looking statements involve other inherent risks and uncertainties, and
other important factors could cause actual results to differ materially from
those anticipated, including those contained in U.S. Bancorp's Form 10-K and
other reports on file with the U.S. Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are made, and U.S.
Bancorp undertakes no obligation to update them in light of new information or
U.S. Bancorp Piper Jaffray Inc. is a member of the National Association of
Securities Dealers, CRD number 665.
SOURCE U.S. Bancorp Piper Jaffray