Three major Wall Street banks will pay a combined $15 million under a censure issued on Tuesday by brokerages regulator NASD for improper initial public stock offering allocation practices.
NASD said it disciplined Bear Stearns Cos, Deutsche Bank and Morgan Stanley in a case that puts controversial stock offering practices under more scrutiny.
Bear Stearns will pay $4.95 million; Deutsche Bank, $5.29 million; and Morgan Stanley, $5.39 million, NASD said.
It said it found "that the firms violated NASD rules when they received unusually high commissions from certain customers on listed agency trades - without inquiry and within one day of allocating shares in 'hot' IPOs to those same customers."
The regulator said its action was part of a continuing focus on abuses in the IPO allocation process.
"None of these firms was providing unusual or extraordinary services to justify these very high commissions," said Mary Schapiro, NASD vice chairman. "There was no legitimate reason to pay these firms millions of dollars more than other firms would charge to carry out routine trades."
The investment banks were not immediately available for comment.