Washington, D.C. – NASD announced today that it censured and fined Wells Fargo Securities, LLC of San Francisco $250,000 – and imposed a $40,000 fine and 60-day supervisory suspension against its former Director of Research, Douglas van Dorsten – for failing to disclose in a research report that the lead analyst on the report had accepted a job at Cadence Design Systems, a San Jose, CA company that was the subject of the report.

NASD also announced that it filed a complaint against Jennifer Jordan, the former Wells Fargo research analyst, for failing to disclose in a series of three research reports that she was pursuing employment and then had accepted a job with Cadence, which was the subject of all three reports. As part of her compensation package with Cadence, Jordan was to receive 15,000 shares of Cadence stock, along with the option to purchase an additional 75,000 shares, once she started working at Cadence.

“The actions announced today should remind brokerage firms and research analysts of the importance of full disclosure of conflicts of interest in research reports,” said James S. Shorris, NASD Executive Vice President and Head of Enforcement. “There is no doubt that, where a research analyst is pursuing employment or has accepted a job with a covered company, NASD rules require that information concerning such a clear conflict of interest must be disclosed in research reports.”

NASD’s disciplinary actions concern three research reports issued by Wells Fargo in February, March, and April of 2005. The subject of the research reports, Cadence, designs semi-conductors for use in the global electronics market. In each report, Jordan was listed as the lead analyst.

NASD alleged in its complaint that from January through April 2005, Jordan applied for, interviewed for, and then accepted a job at Cadence. On February 4, 2005, according to NASD’s complaint, after Jordan had applied for a job at Cadence, Wells Fargo issued a research report covering Cadence that increased the price target for the company from $16 per share to $18 per share. The report did not disclose that Jordan had applied for a job at Cadence.

The complaint further alleges that on March 2, 2005 – after Jordan had met with Cadence senior management twice to interview for a job with the company – Wells Fargo issued a research report reiterating the $18 per share price target. That report did not disclose that Jordan had applied for a job at Cadence or that she was in employment discussions with the company.

After Wells Fargo issued the March 2, 2005 report, Jordan was offered a position at Cadence as Corporate Vice President of Investor Relations. As part of the offer, Cadence agreed to pay Jordan over $300,000 in salary and bonuses, provide her with 15,000 shares of Cadence stock and an option to purchase 75,000 additional shares, and provide her a $1 million interest-free loan. Shortly after she accepted the offer on April 9, 2005, Jordan told van Dorsten and others at Wells Fargo that she had accepted a job at Cadence.

On April 28, 2005, Wells Fargo published another research report concerning Cadence. That report raised revenue estimates for Cadence for the second quarter of fiscal year 2005 and increased both revenue and price-per-share estimates for the company for fiscal years 2005 and 2006. On the morning the report was issued, Jordan flew to Cadence’s offices to attend a management meeting as a future employee of the company.

Although Wells Fargo and van Dorsten had learned nearly three weeks prior to the April 28 report that Jordan had accepted a position at Cadence as Vice President of Investor Relations, that information was not disclosed in the report. In his position as Director of Research, van Dorsten approved the April 28 report without requiring that the report disclose that Jordan had accepted a position with Cadence.

In its settlement with Wells Fargo and van Dorsten, NASD found that Jordan’s acceptance of a job at Cadence constituted material information, a material conflict of interest, and a financial interest in the securities of Cadence that should have been disclosed in the April 28, 2005 report. NASD found that Wells Fargo and van Dorsten violated NASD rules by publishing the April 28 report without disclosing that information. Wells Fargo and van Dorsten neither admitted nor denied the findings, but consented to the entry of NASD’s findings.