News Release

NASD Fines U.S. Bancorp Piper Jaffray and Managing Director $300,000

Washington, D.C. — NASD announced today that, as part of its ongoing regulatory focus on investment banking and research analyst activities, it has reached a settlement with U.S. Bancorp Piper Jaffray and a Piper Managing Director, Scott Beardsley, who is the senior banker in the firm's biopharmaceutical investment banking practice. NASD found that Beardsley threatened Antigenics, Inc., a Nasdaq-listed company, by telling them that Piper would discontinue research coverage and stop making a market in the company's stock if it did not select Piper as lead underwriter for a planned secondary offering.

NASD found that the threats were made to force Antigenics to select Piper as lead underwriter. This type of conduct violates NASD's rule requiring all firms and associated persons to adhere to high standards of commercial honor and just and equitable principles of trade. It also has the potential to undermine competition for investment banking services.

"Brokerage firms and their executives cannot use threats regarding research activities as a way to obtain investment banking business. The threat to drop research coverage if Piper was not selected as the lead underwriter for a secondary offering was totally inappropriate and undermines the integrity of the market", said Mary L. Schapiro, NASD's President of Regulatory Policy and Oversight. "It is essential that investors have confidence that decisions firms make about coverage of companies are based on merit and nothing else."

As part of their settlement with NASD, Piper was censured and fined $250,000 and Beardsley was censured and fined $50,000.

NASD found that, on Dec. 27, 2001, the CEO of Antigenics, Inc., informed Beardsley and another Piper investment banker that the company had chosen another firm to serve as lead manager of a planned secondary offering. After speaking with Piper's head of investment banking, Beardsley told the CEO that Piper would either serve as the lead underwriter for the planned secondary offering or would not participate. In the same conversation, Beardsley threatened the CEO that if Piper were not selected as lead underwriter, the firm would drop research coverage of Antigenics and would stop making a market in Antigenics stock. The next day, the CEO of Antigenics wrote a letter to the Chairman of the Board of Piper complaining about the threatened "retaliation." At this time, Piper rated Antigenics a "Strong Buy."

On Jan. 2, 2002, Antigenics announced that it planned to offer 4 million shares of stock to the public in a secondary offering, using another investment banking firm as lead underwriter. Piper did not serve in any capacity in that offering, which went effective on Jan. 11. On Jan. 4, two days after Antigenics's announcement of its proposed secondary offering, Piper discontinued its research coverage of Antigenics.

In settling this matter, Piper and Beardsley neither admitted nor denied NASD's findings.

Investors can obtain more information and the disciplinary record of any NASD-registered broker or brokerage firm by calling (800) 289-9999 or by sending an e-mail through NASD's Web site at

NASD is the leading private-sector provider of financial regulatory services, dedicated to bringing integrity to the markets and confidence to investors through effective and efficient regulation and complementary compliance and technology-based services. NASD touches virtually every aspect of the securities business -- from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and member firms. For more information, please visit our Web site at