SEC settles with two firms on stock research

Deutsche Bank Securities and Thomas Weisel Partners agreed to pay a combined $100 million to settle charges involving conflicts…

Deutsche Bank Securities and Thomas Weisel Partners agreed to pay a combined $100 million to settle charges involving conflicts of interest between research and investment banking, US regulators said.

The firms were the holdouts in the landmark $1.4 billion settlement over stock-research analyst misconduct that was reached more than a year ago with 10 other investment banks.

The US Securities and Exchange Commission (SEC) said Deutsche Bank Securities agreed to pay $87.5 million, including $7.5 million for failing to produce e-mails in a timely manner. Thomas Weisel Partners will pay $12.5 million.

As part of the settlement, the SEC said, the firms are required to separate the research and investment banking departments, restructure how research is reviewed and supervised, ban analysts from receiving compensation for investment banking, and make independent research available to investors.

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The agreement also restricts firms from allocating securities of hot initial public offerings to certain company officers and directors, a practice known as "spinning," to attract investment banking business.

A spokeswoman for Deutsche Bank Securities, the US brokerage unit of Germany's Deutsche Bank, said the firm is "pleased to reach this final resolution".