Wall Street corruption probes spread
Executives Sued for IPO Profits
Five telecom industry executives, including Los Angeles sports mogul Philip F. Anschutz and former WorldCom Inc. chief Bernard J. Ebbers, were sued Monday by New York state on charges that they steered business to a big Wall Street brokerage in exchange for hot stock offerings.
The civil suit by New York Atty. Gen. Eliot Spitzer alleges that the men directed corporate finance work for their firms to Salomon Smith Barney, the brokerage arm of Citigroup Inc., in return for sweetheart deals on initial public stock offerings in recent years.
This one could get huge as the investigations spread. No doubt many more executives were doing the same – giving company business to brokerages on the condition that they personally got in on profitable IPO’s.