The Wall Street Journal reports that US securities firms are asking regulators to be more lenient with them and agree to lower fines in order to settle the various federal and state probes concerning Wall Street stock research practices.
New York state Attorney General Eliot Spitzer is determined to have his pound of flesh and insiders still feel that fines totalling at least $1bn will need to be paid by the investment banking industry. Wall Street is understood to be pleading that times are hard and that, as firms will need to provide an additional $1bn over the next 5 years to fund independent stock research, a $1bn penalty is too severe.
The penalty funds may well be used to establish a restitution fund for investors who lost out due to the actions of some of the firms who will now have to pay up. For many aggrieved investors $1bn in fines will not be seen as enough.