New York, Dec 21: Wall Street agreed on Friday to pay $1.4 billion to settle charges that it put its interests ahead of investors, issuing tainted research and secretly handing out hot stocks to favoured clients. The unprecedented agreement comes after months of embarrassing revelations about how the largest brokerages did business during the stock market boom.

Even as stocks tumbled from the record highs of early 2000, research analysts stayed bullish while investors lost billion of dollars and much of their faith in the financial markets.
Under terms of the settlement with state and federal regulators, Citigroup, Credit Suisse First Boston and eight other brokerages agreed in principle to strengthen separation of research analysts and bankers working on underwriting deals, pay $900 million in fines and restitution, $450 million to fund independent research and $85 million for investor education.

Separately, Jack Grubman, the former telecommunications analyst for Citigroup's Salomon Smith Barney, agreed to a $15 million fine and a lifetime ban from the securities industry.
As part of the broad settlement, stock analysts like Grubman will be shut out of investment road shows and deal pitches, or meetings where brokers recommend deals to potential clients. So-called spinning, directing shares of lucrative initial public offerings to favored clients, will also be banned. Bureau Report