Two interesting stories doing the rounds last week, both legacies of the dotcom boom.
Associated Press reports that JP Morgan is suing 23 former officers and directors of Global Crossing for $1.7bn. The bank accuses Gary Winnock, the company's founder, and others of having 'devised, directed and controlled' a scheme to hide the true financial position of the company. JP Morgan is one of several financial institutions who put $12.4bn into Global Crossing two years ago, just before the company filed for bankruptcy protection. The company, which emerged from bankruptcy earlier this month, is not named in the lawsuit.
The New York Daily News reports that former Bank of America stock analyst Andrew Hamerling was last week fined and suspended by the National Association of Securities Dealers. He was accused of recommending certain stocks to the public at the same time he advised others to short them. Hammerling has been banned for 6 months and will have to pay a $125,000 fine if he starts work again in the industry.
Bank of America was one of a number of firms which did not sign up to the recent global settlement on industry stock research practices. Regulators are said to be carefully looking at those other firms to assess whether action can now be taken against them.
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