August 26, 2004

State Banking Commissioner John P. Burke announced today Connecticut stands to receive $354,243 as a result of a national settlement agreement between state and federal securities regulators and Deutsche Bank Securities Inc. and Thomas Weisel Partners LLC. The settlements result from allegations of conflicts of interest at brokerage houses where analysts recommended stocks due to improper influence from their investment banking colleagues.

Commissioner Burke made the announcement following investigations of the two firms by the California Department of Corporations, the U.S. Securities and Exchange Commission, NASD, Inc., and the New York Stock Exchange. The settlements are related to the April 2003 Global Settlement that ten other investment banks reached with the state, federal and industry regulators.

Deutsche Bank will pay a total of $87.5 million: $25 million in disgorgement, $25 million as a penalty for various conflicts of interest, $25 million to fund independent research, $5 million to fund and promote investor education, and $7.5 million for failing to promptly produce e-mail and thereby delaying by over a year the investigation as to Deutsche Bank. Thomas Weisel Partners will pay a total of $12.5 million: $5 million in disgorgement, $5 million as a penalty for various conflicts of interest, and $2.5 million to fund independent research. Connecticut's total of $354,243 represents $301,763 from the Deutsche Bank settlement and $52,480 from the Thomas Weisel Partners settlement.

Commissioner Burke said the investigations of Deutsche Bank and Thomas Weisel Partners, together with the 2003 Global Settlement, are part of a comprehensive regulatory effort to reform the relationship between investment banking and research and to manage appropriately conflicts of interest. "Today's settlements represent a significant step in our continuing efforts to ensure that investors are treated fairly and provided with objective research," Burke stated.

Under the terms of the settlement, Deutsche Bank is required to distribute $2.5 million to the Investor Protection Trust (IPT), which will use the money to fund investor education initiatives on the state and national levels. The IPT is an established charitable organization with experience handling settlement funds and a history of investor education successes.

The settlements were negotiated by California, the District of Columbia and Maryland and unanimously recommended by the Board of Directors of the North American Securities Administrators Association. "These enforcement actions, coupled with pending reforms in the mutual fund industry, will help to restore investor confidence," Burke concluded.