October 4, 2002
WASHINGTON -- The government's top securities watchdog, New York state's attorney general and other regulators pledged Thursday to work together to stem abuses and conflicts of interest at big Wall Street firms that have rattled investors' confidence.
Harvey Pitt, chairman of the Securities and Exchange Commission, and Eliot Spitzer, the New York attorney general, said they planned to come up with a common plan in the next few weeks to investigate and punish abuses by investment firms such as conflicts of interest among analysts and unfair distribution of hot new stocks.
The National Association of Securities Dealers, which polices the brokerage industry, the New York Stock Exchange and state securities regulators also have been pursuing related investigations.
In a related move, the NASD and the NYSE said they were tightening their rules governing analysts and new stock offerings.
In recent months, the SEC and Spitzer have been investigating conflicts of interest and other abuses at several big investment firms and have appeared at times to be competing with each other.
In a statement, the SEC, Spitzer's office and the other securities regulators announced "a joint effort to bring to a speedy and coordinated conclusion the various investigations concerning analyst research and IPO allocations."
"Swift and appropriate resolution of these investigations will protect investors . . . and help enhance investor confidence in the marketplace," the statement said.
The regulators said they planned to present proposed resolutions to the investment firms under investigation and to give them "a brief opportunity" to work out settlements. They said they may propose industrywide reforms.
Spitzer has not said publicly what firms are under investigation by his office and other regulators.