Frank Quattrone has been sentenced to 18 months in prison for his involvement in obstructing justice in federal probes into the possible mishandling of IPOs at his former place of employment, CSFB. From the news report, he was also fined $90,000 for his infractions. I am unsure what the federal sentencing guidelines are for such crimes, but I do not really think a $90K fine is large enough.
Is this just the tip of the iceberg? Are more federal charges brewing in NYC for the underhanded tactics of i-bankers? Is it time for the entire securities industry to change the way it licenses traders, brokers, analysts, consultants? I don't know.
As I am preparing for the CFA examinations, I cannot help but remember the readings on ethics and rules of conduct. Perhaps, i-bankers should be forced to sign annual declarations which stipulate their course of conduct and possible violations for the previous year. If a committee of overseers rule that their actions did violate rules of conduct, then immediate actions can be taken. None of this: post-event redress. And, if bankers refuse to sign the declaration, they should face serious sanctions and possible suspension from investment activities.
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