Monday, July 31, 2006

SPITZER IPO FRAUD SETTLEMENT --
Clark E. McLeod, the former chairman and chief executive of McLeodUSA Inc., agreed to turn over $4.4 million he was accused of earning from the act of "spinning," [New York State] Attorney General Eliot L. Spitzer said. The deal was to be formally announced today.

McLeod was accused of directing more than $77 million of McLeodUSA's investment banking business to Salomon Smith Barney. In exchange, the company "secretly" gave McLeod shares of more than 30 stocks before companies' initial public offerings, according to Spitzer's 2002 civil lawsuit.
See also WSJ Law Blog.