Robertson Stephens and Ex-Employee Are Fined

Robertson Stephens Inc. and a former top investment banker at the firm have been fined a total of $350,000 by securities regulators for allegedly trying to extort $1 million from a company as a condition for continued research coverage.

The National Assn. of Securities Dealers, the brokerage industry’s self-policing organization, announced the civil fines Wednesday of $275,000 against the now-defunct Robertson Stephens and $75,000 against Richard Davies, who worked in the firm’s New York office.

The NASD also censured Davies and Robertson Stephens, which was a major investment firm based in San Francisco that specialized in taking high-tech companies public.

Robertson Stephens was a unit of FleetBoston Corp., which was taken over by Bank of America Corp. last week.

The NASD said that in June 2001 Davies threatened an executive of Poway, Calif.-based ResMed Inc. with dropping Robertson Stephens’ research coverage of the maker of respiratory devices unless it paid $1 million in investment-banking fees for work on a ResMed bond offering. At the time, Robertson Stephens’ analysts rated ResMed as “buy.” ResMed executives did not pay the money, the NASD said, and Robertson Stephens did not participate in the bond offering.

A few weeks later, the investment firm issued a research report changing its rating for ResMed to “market perform,” less desirable than “buy.” It was the last research report on ResMed that the firm issued, according to the NASD.