More important, many of those stocks soared the first day of trading, providing large instant profits for those lucky enough to get allocations in the offerings.
The investment banking practices of spinning, offering allocations to executives at other companies in hopes of winning future business, and laddering, or requiring buyers to place aftermarket orders at higher prices to get allocations, are now clearly banned.
That means even for risk-averse investors "it's hard to get allocations below 10% plus" based on standard models for portfolio diversification.
"Selling insiders, venture capitalists and institutions able to get allocations are making out like bandits, and the public is being fleeced," says Hickey.
Since April 1, Morgan Stanley Wealth Management financial advisers have seen their compensation cut by as much as 50percentt on sales of new issues to clients who use the firm primarily to get allocations of those securities.
It is more a question of getting allocation approved by their investment committees than anything else," says Charmoy. "People will come back because it is difficult in this environment to get returns even if equity markets have done well this year and last year thanks to QE". See the Russia panel here from the Miliken Institute.
Last month, a Baghdad newspaper published the list of companies that got allocations, prompting a chorus of denials.
But it is the smaller community banks like Independent that are seeing the largest number of investments, with 186 banks so far getting allocations of less than $100 million.
I can describe the problems Sangam has had in getting allocations, and these problems expose certain inadequacies of the UA and GSC funding policies.
Perhaps some investors could make the case that they would have gotten allocations if those paying kickbacks had not gotten more shares as a result, but the amount of such claims would seem to be limited.
