April 28, 2003                                                         Contact:Lucas Hamilton

Montana to receive $3.875 million in Wall Street Settlement Historic Settlement Requires Brokerage Houses to pay Fines, Fund Independent Research and Investor Education


      
      HELENA - Under the terms of a settlement announced today between securities regulators and Wall Street firms, Montana stands to receive $3.875 million upon final acceptance of the terms of the agreement. 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.
      
      "This historic agreement represents the ending of a sad chapter in the history of our financial markets," said State Auditor John Morrison, Montana's Securities Commissioner. "The industry reforms agreed upon in this settlement will provide for more objective research and stronger protections for investors.
      
      "It is our hope that this settlement will change the way business is conducted on Wall Street and that as a result, wary and mistrustful investors will return to our markets," Morrison said.
      
      Under the terms of the settlement, the firms also are required to distribute $30 million over a period of five years to the national Investor Protection Trust (IPT). The money will be used to fund investor education initiatives on the state and national levels, and Montana has been allocated $300,000 over a five-year period for this purpose. The IPT is an established charitable organization with experience handling settlement funds and a history of investor education successes.
      
      The completion of the enforcement actions was announced at a press conference at the SEC today, implementing the global settlement reached and announced in principle by regulators last December. The announcement was made by North American Securities Administrators Association President Christine Bruenn, Securities and Exchange Commission Chairman William H. Donaldson, New York Attorney General Eliot Spitzer, NASD Chairman and CEO Robert Glauber, New York Stock Exchange Chairman and CEO Dick Grasso and state securities regulators.
      
      That settlement followed joint investigations by the regulators of allegations of undue influence of investment banking interests on securities research at brokerage firms. The enforcement actions announced today track the provisions of the December global settlement in principle.
      
      The ten firms against which enforcement actions are being announced today are:
      
       Bear, Stearns & Co. Inc. ("Bear Stearns")
      
       Credit Suisse First Boston, LLC ("CSFB")
      
       Goldman Sachs & Co. ("Goldman")
      
       Lehman Brothers, Inc. ("Lehman")
      
       J.P. Morgan Securities, Inc. ("J.P. Morgan")
      
       Merrill Lynch, Pierce, Fenner & Smith, Incorporated ("Merrill Lynch")
      
       Morgan Stanley & Co. Incorporated ("Morgan Stanley")
      
       Citigroup Global Markets Inc. f/k/a Salomon Smith Barney, Inc. ("SSB")
      
       UBS Warburg LLC ("UBS")
      
       U.S. Bancorp Piper Jaffray Inc. ("Piper Jaffray")
      
      Montana is committed to the settlements negotiated by the lead states and unanimously recommended by the NASAA Board of Directors. The Securities Department will review the settlement documents as they are received and ensure that the interests of Montana residents are well served by this settlement. Morrison said he hopes to approve the settlement shortly.
      
      In 2001 and early 2002, Congress and the SEC examined the issue of analyst conflicts of interest. In April 2002, The New York Attorney General's office announced an enforcement action against Merrill Lynch based on internal emails it uncovered that showed analysts were pressured to issue bullish stock recommendations to please investment banking clients. Soon afterwards, regulators from the states, industry self-regulatory organizations and the SEC formed a joint task force to investigate Wall Street's leading investment banks. In December, regulators announced an agreement in principle with the firms. Today's announcement marks the finalization of that agreement.