Two more brokerage firms have agreed to settlements with a slew of U.S. regulators concerning conflicts of interest in equity research.

Deutsche Bank Securities Inc. will pay $87.5 million to settle conflict-of-interest charges involving research and investment banking, the Securities and Exchange Commission as well as industry and state regulators said Thursday.

In addition, Thomas Weisel Partners LLC will pay $12.5 million to settle similar charges, the SEC said in a press release.

These settlements are related to the April 2003 global settlement that 10 other investment banks reached with the SEC, state securities regulators, NASD, and NYSE following investigations of allegations that investment banking interests had undue influence on securities research at brokerage firms. These enforcement actions are part of a comprehensive regulatory effort to reform the relationship between investment banking and research and to improve industry practices relating to fundamental research.

Under the settlement, Deutsche Bank Securities will pay a total of US$87.5 million: $25 million in disgorgement, $25 million as a penalty for various conflicts of interest, $25 million to fund independent research, $5 million to fund and promote investor education, and $7.5 million for failing to promptly produce all e-mail and thereby delaying by over a year the investigation as to Deutsche Bank Securities.

Thomas Weisel Partners will pay a total of $12.5 million: $5 million in disgorgement, $5 million as a penalty for various conflicts of interest, and $2.5 million to fund independent research.

Under the settlements, half of the disgorgement and penalty amounts will be paid by the firms in resolution of actions brought by the SEC, NYSE and NASD, and will be put into funds to benefit customers of the firms. The remainder of the disgorgement and penalty amounts will be paid to the state securities regulators.

In addition to the monetary payments, Deutsche Bank Securities and Thomas Weisel Partners are required to comply with significant requirements that will dramatically reform their practices, including separating the research and investment banking departments at the firms, restructuring how research is reviewed and supervised, prohibiting analysts from receiving compensation for investment banking activities, and making independent research available to investors.

The SEC and the regulators charged that from mid-1999 through mid-2001, both firms engaged in acts and practices “that created or maintained inappropriate influence by investment banking over research analysts,” resulting in conflicts of interest, the SEC said.

The proposed final judgments in the SEC actions are subject to court approval, the SEC said.