The New York Times reports that CSFB has described the complaint filed against it this week by the state of Massachusets as 'fundamentally flawed' and denied accusations of securities fraud.
The firm has denied allegations that it provided investment advise and new share issues as a reward to executives of companies who had hired the bank to undertake lucrative advisory or underwriting work for their businesses. CSFB's analysts have also been accused of keeping unrealistic ratings on client companies in order to ensure that they kept hold of their investment banking business.
CSFB's star IPO banker, Frank Quattrone, is expected to be subpoenaed by Massachusetts Secretary of the Commonwealth William Galvin early next year. His testimony will be vital. Galvin has already said that 'we feel that the evidence has mounted very heavily that there was fraud and that research was tainted by investment banking decisions'.
The firm confirmed that it 'continues to work closely with the broad coalition of state and federal regulators to acheive significant national reforms'.