Wall Street firms are expected to face fines totaling $1 billion or more if market regulators prevail in renewed talks last night aimed at settling numerous investigations of stock research abuses, said sources familiar with the matter.
Regulators want to hit the major investment banks under investigation with meaningful penalties, with officials divided over the adequacy of preliminary figures being proposed in meetings under way in New York, sources said.
"The meetings are simply discussions between the Wall Street firms and the regulators. The numbers being discussed are also simply for discussion purposes," Mr Andre Pineda, California's deputy corporations commissioner, said.
"It's the position of California that many of the numbers are too low," Mr Pineda said.
For eight weeks, regulators and bankers have been hammering out a deal to end probes of allegations that stock analysts slanted their research to please corporate executives and win investment banking business for their firms.
About a dozen Wall Street firms were said to be involved in the talks. On a separate track, the U.S. Securities and Exchange Commission had been working toward writing new rules for stock analysts, although progress has recently stalled with the November 5th resignation of SEC Chairman Mr Harvey Pitt amid controversy, said sources close to the commission.
Damaging e-mails, including some in which analysts privately disparaged stocks they had publicly recommended, have been uncovered at Citigroup, Merrill Lynch & Co. And the Credit Suisse First Boston unit of Swiss-owned Credit Suisse Group.
Merrill, which booked 2001 revenue topping $38 billion, paid $100 million earlier this year to settle charges of misleading research levied by New York State Attorney General Mr Eliot Spitzer, who has led the charge since for regulators.