Securities regulators fined Robertson Stephens, the former arm of

FleetBoston Financial

(FBF)

, $28 million for improperly sharing profits with customers on hot initial public offerings.

Under the terms of the settlement, Robertson Stephens was ordered to pay $14 million to the NASD and $14 million to the

Securities and Exchange Commission

.

Regulators said Robertson Stephens collected inflated commissions from customers on other trades in exchange for receiving the hot IPO offerings.

"This well-orchestrated scheme to inflate firm commissions in return for granting hot IPO allocations corrupts the capital-raising process," said Mary Schapiro, NASD's vice chairman and president of regulatory policy operations.

Robertson Stephens, which is in the process of withdrawing from the securities industry, neither admitted nor denied the allegations.

Shares of FleetBoston were up 50 cents, or 1.8%, at $27.63 in midday trading Thursday.