Research, Regulators & IPOs

The cheque's in the post - really. Around 20,000 cheques (or checks as they say in the US) will be despatched in the next few weeks to investors who were disadvantaged due to dodgy US investment banking stock research. Investors are eligible to receive $440m in compensation for the alleged activities of stock researchers, who were more interested in keeping their investment bankers happy than making the proper calls when rating stocks.

The $440m is part of the $1.4bn global settlement US regulators made in 2003 with a number of investment banks to settle claims about tainted research. The cheques will range from $100 to $15m, and be made payable mostly to individuals or mutual funds. Christopher Cox, chairman of the US regulator The Securities & Exchange Commission, said 'I am pleased to report that the checks are going out ahead of schedule. Every dollar collected by the commission in this settlement will go back where it belongs - into the victims' pockets'.

Talking of US regulators, the National Association of Securities Dealers (now known as NASD) says that fines collected from disciplinary actions increased 21% this year over 2004. NASD filed 1,412 disciplinary actions in 2005, and levied $125.4m in punitive fines.

The New York Stock Exchange sold a seat membership on 27th December for $3.75m, up $50,000 on the last sale just a few days before. Seat prices have more than tripled this year, with the record price now $4m. The exchange is also moving swiftly to increase its income. Floor traders will soon be charged $5,000 to use hand held trading devices.

Finally, the number of London-listed IPOs increased to 494 this year, 129 of which were for foreign companies (up from 71 in 2004). IPO proceeds for London floats increased from $6.5bn last year to $10.6bn in 2005.

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