Blank-Check IPOs Probed

Securities regulators are investigating trading in shares of so-called blank-check IPOs, which are stock deals done by companies in search of a business plan.

The NASD investigation is focusing on some of the investment banks that have been underwriting these somewhat unusual initial public offerings, sources say. The inquiry, which began last year, is in its early stages.

Sources say one investment firm drawing particular scrutiny is EarlyBirdCapital, a New York firm that has been either the lead underwriter or co-manager on about half of the 47 blank-check initial offerings to come to market the past three years. More than any other investment bank, EarlyBird is credited with breathing new life into blank-check IPOs, after the stock offerings fell out of favor in the late 1990s. ...