By Jonathan Stempel
NEW YORK (Reuters) -Piper Sandler and Stifel Monetary on Wednesday requested a choose to free them from “onerous” restrictions from the U.S. Securities and Alternate Fee’s international settlement greater than twenty years in the past with 12 funding banks over analyst conflicts.
The $1.5 billion settlement in 2003 and 2004 addressed a scandal over analysts issuing optimistic analysis to assist Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, the defunct Bear Stearns and Lehman Brothers, and others win funding banking enterprise.
In a submitting in Manhattan federal courtroom, Piper and Stifel mentioned they shouldn’t be certain to necessities in a associated consent decree, together with having to construct “firewalls” between analysis and funding banking, whereas almost all rivals are held to looser requirements the SEC accredited in 2015.
Piper and Stifel mentioned the disparate therapy makes it more durable to compete with different middle-market banks, in addition to massive banks which can be certain by the settlement however have a lot bigger consumer bases and are higher identified globally.
In addition they mentioned the decree hurts the general public curiosity as a result of analysis might have completely different protections relying on which financial institution issued it, and smaller corporations might battle to lift capital as a result of compliance prices imply some banks can not afford to supply analysis protection.
“The consent decree has achieved its objective,” Piper and Stifel mentioned.
An SEC spokesperson declined to remark.
Piper is predicated in Minneapolis, and Stifel is predicated in St. Louis. They’re the respective successors to US Bancorp Piper Jaffray and Thomas Weisel Companions, the smallest funding banks within the SEC settlement.
The settlement had been engineered primarily by former New York Legal professional Common Eliot Spitzer, addressing alleged conflicts by analysts like Citigroup’s Jack Grubman and Merrill Lynch’s Henry Blodget.
The circumstances are SEC v US Bancorp Piper Jaffray Inc, U.S. District Court docket, Southern District of New York, No. 03-02942; and SEC v Thomas Weisel Companions LLC in the identical courtroom, No. 04-06910.
(Reporting by Jonathan Stempel in New York; Modifying by Chris Reese)
