Piper Jaffray is fined $2.4 million

WASHINGTON, July 12 (UPI) -- NASD, headquartered in Washington, D.C., said Monday it has censured and fined Piper Jaffray & Co. $2.4 million.

The exchange said Piper Jaffray violated NASD rules by allocating and selling profitable hot initial public offerings to executives of corporations from which Piper Jaffray was seeking, or had obtained, investment banking business.

"During 1999 through 2001, Piper Jaffray improperly allocated and sold shares of these hot IPOs to 22 corporate executives, primarily CEOs and CFOs of public companies. None of these executives did any personal business with Piper Jaffray during the relevant period," NASD said.

"The only activity in each executive's account was the purchase and sale of hot IPO shares. Each individual was a key executive officer (or spouse) of an existing or potential Piper Jaffray investment banking client and was in a position to influence the selection of the investment banker for their employer," the exchange added.

NASD said Piper Jaffray earned more than $16 million from the issuers, while the 22 key executives made a total of approximately $2.4 million in profits.

Individual profits ranged from $9,000 to approximately $242,000. Each executive was allocated at least five hot IPOs, with some executives receiving as many as 20.