The settlement is "one of the largest civil penalties ever imposed against a broker-dealer," said Stephen Cutler of the US Securities and Exchange Commission's (SEC) enforcement division.

The SEC investigated whether CSFB sought to inflate its fees in exchange for granting clients guaranteed allocations of highly-sought-after technology stocks.

CSFB said it neither admitted nor denied guilt in making the settlement.

Leaving the past behind

Chief executive John Mack said the bank was committed to upholding the highest standards and that "Today's settlement...allows us to move forward."

CSFB said it was taking disciplinary action against some staff.

The SEC has charged CSFB with "abusive practices" in the allocation of newly-listed technology stocks, saying the investment bank had "wrongfully obtained for itself tens of millions of dollars of its customers...profits".

CSFB took advantage of its position as an underwriter of new listings by allocating sought-after shares to customers who agreed to share their profits by paying "excessive commissions", said Mr Cutler.

Hot stocks

The SEC found more than 100 customers were allocated shares and, in return, funnelled between 33% and 65% of the profits they made from the shares back to CSFB.

Often, these clients sold the shares as the price soared on the first day of trading.

Among the highly coverted technology stocks for which CSFB was lead underwriter, in a position to control the allocation of shares to clients, the Commission cited Linux Systems, Selectica, Gadzooks Networks, and MP3.com.

CSFB, one of the best-known names on Wall Street, acquired a reputation for aggression and daring in the 1990s.