It appears the two Wall Street firms that will get whacked the hardest in the $1.4 billion tainted-research scandal are


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and Credit Suisse First Boston.

A source close to the wide-ranging investigation said the two firms are the only ones regulators intend to charge with committing some form of securities fraud when the final settlement agreements are filed against a dozen Wall Street firms.

The other firms, which include

Morgan Stanley



Goldman Sachs

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Bear Stearns



Lehman Brothers


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, will face a series of lesser charges that include allegations of violations of either state or NASD rules and regulations.

Citigroup couldn't be reached for comment, and CSFB declined to comment.

Merrill Lynch


, which previously paid $100 million to settle a similar investigation into its research department by New York Attorney General Eliot Spitzer, also might face a fraud charge, some have suggested, in the so-called global settlement deal. The earlier settlement agreement did not contain a fraud allegation.

In each case, the Wall Street firms are not expected to admit to any of the charges leveled against them. As is common in securities settlement cases, firms often neither admit nor deny allegation, while agreeing to pay a fine to regulators.

To some extent, the fact that only Citigroup and CSFB, a division of

Credit Suisse Group


, would be charged with fraud isn't surprising, since both firms will pay the stiffest fines in the $1.4 billion settlement.

Other sources say all the firms are now reviewing final versions of the settlement agreements and are supposed to submit any last-minute objections to the

Securities and Exchange Commission

by Friday. The final settlements could be announced at a press conference sometime in the next two weeks.

Last December, a gaggle of securities regulators held a press conference at the

New York Stock Exchange

to outline the broad parameters of the settlement. But after that deal was struck, the firms and regulators still had to negotiate the details of those agreements, including the specific charges that will be leveled against the firms.

The final agreements that are filed with a federal court are likely to include a series of exhibits that will document some of the incriminating evidence regulators gathered during their inquiry. Some of those documents may include internal emails sent by analysts and brokers, in which private doubts were raised about some of the stocks the firms were touting to investors.

A filing of a fraud charge against any firm might bolster the claims of investors seeking damages in private arbitrations and class-action suits. The exhibits are expected to provide ammunition to investors in pursuing their claims.