During 1999, 2000 and 2001, Needham received four payments in consideration for
publishing research on four public companies. Needham did not disclose those payments in its
research reports. The firm’s failure to disclose these payments was in violation of Section 17(b)
of the Securities Act.
In addition, from July 1999 through June 2001, Needham failed to preserve business-
related internal electronic mail communications that it was required to maintain pursuant to
Section 17(a) of the Exchange Act and Rule 17a-4 thereunder.
During the period 1999 through at least 2003, broker-dealers that were underwriting
public offerings sometimes paid other broker-dealers to issue research on or “cover” their
issuer clients. These arrangements were made with regard to both initial public offerings
(“IPOs”) and secondary offerings. In some situations, the issuers directed the underwriters to
make the payments, and in others, the lead underwriters selected the firms that received the
payments. Some firms issuing the research actively solicited the payment.
In certain instances, the payments were made to firms that were not participating in the
underwriting, and therefore not earning investment banking fees from the issuer on the
particular offering. In other instances, firms that were underwriting small portions of the
offering received additional payments in consideration for publishing research. These
payments often were significantly larger than the underwriting fee the firm received.
Do some DD, Dan!
Sentiment: Strong Sell
1999 through 2003, really is that the best you can do. If your going to bash please use a little more up to date information to make your point. It is like saying the Japanese bombed Pearl Harbor in 1941 so we should not go to Hawaii, you see how stupid you look. Idiot.
Sentiment: Strong Buy