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Credit Suisse First Boston Corp. on June 28 fired three brokers from its San Francisco-based technology private client services (PCS) group amidst an ongoing federal probe that is investigating how the company allocated shares in initial public offerings. New York-based CSFB, a unit of Credit Suisse Group’s Zurich bank, fired John Schmidt, head of the PCS group, as well as Michael Grunwald and Scott Bushley, who both reported to Schmidt in that same group. Schmidt reported to high-profile West Coast technology banker Frank Quattrone and Andy Benjamin, CSFB’s head of private client services in New York. NASD Regulation Inc. warned Benjamin in early May that he may be charged with violations. A spokeswoman for CSFB told The Deal the employees were fired for violating company policy and procedures. The three had been on administrative leave since April. Although CSFB is not filing any criminal charges against the three individuals, the company said it has informed regulators of its actions. According to an 8-K filing under the Securities Exchange Act, the U.S. Attorney’s Office for the Southern District of New York and the Securities and Exchange Commission are focusing on the company’s IPO practices in 1999 and 2000, particularly at the relationship between the payment of allegedly excessive commissions to CSFB and IPO share allocations. CSFB said in the filing, “These investigations could result in enforcement and other actions against CSFB by one or more of the investigating entities,” adding that the company “intends to defend itself vigorously against all of the claims.” The company issued a statement in December saying the SEC had asked the company for information regarding its IPO share allocation process. CSFB, which said several investment banks are also involved in the probe, stated that it is cooperating with the authorities by providing documents and witnesses requested in subpoenas. CSFB has conducted its own internal investigation into the charges. The spokeswoman for CSFB said the company has not identified any other individuals who have violated its policy and procedures. Copyright (c)2001 TDD, LLC. All rights reserved.

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