Since 2000, the world’s 10 largest investment banks have earned at least $1.28 billion in fees by underwriting securities for companies that later filed for bankruptcy, according to a Bloomberg study.

Citigroup, Credit Suisse Group, and Morgan Stanley were the most active sellers of $76 billion in stocks and bonds issued between 2000 and 2002 for companies that later collapsed, reported the financial information firm.

Citigroup helped underwrite $10 billion of WorldCom bonds and $1.75 billion of Enron bonds not long before those companies entered the two biggest bankruptcies in history, noted Bloomberg. Citigroup earned $348 million all told, more than any other firm, for helping sell $22.7 billion in securities for WorldCom and Enron as well as for Adelphia Communications Corp. and Parmalat Finanziaria SpA.

Credit Suisse First Boston ranked second with $282 million in fees earned by helping to sell $12.6 billion in securities, 40 percent of which were high-yield, high-risk junk bonds for companies including Adelphia and WinStar Communications Inc.

Morgan Stanley followed with $270 million in fees for underwriting $11.7 billion in securities. The eventual failures included three initial public offerings made within six months after the bull market peaked in 2000: Mirant Corp., Genuity Inc., and Ibeam Broadcasting Corp.

In response, CSFB spokesman John Gallagher told the wire service that buyers of junk bonds underwritten by his firm — even including the bonds of companies that went bankrupt — have an average return 20 percent higher than the overall junk-bond market.

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