Byline: Cynthia L. Webb

Drum roll please: After more than two-months without an initial public offering by a U.S. company, a technology firm from the nation's heartland has come out of the gates to raise $80 million. iPayment ( www.ipaymentinc.com ), a Nashville credit and debit card processing company, made its debut yesterday in the public markets at $16 a share, with 5 million shares total sold. IPMT shares closed up more than 30 percent at $21.02 after its first day of trading.

"It appears to be a healthy demand for the stock," John Burch , president of Nashville-based Capital Markets Advisors , told the Nashville Tennessean newspaper. "It was an impressive performance."

But instead of cause for celebration, the IPO managed to remind us of all the scandals that have plagued Wall Street. iPayment's IPO was originally slated for Friday, but that was before media reports surfaced about one of the IPO underwriters. An analyst from Bear, Stearns & Co. appeared in a video about iPayment and touted the company as a smart investment, something that is a no-no according to a new federal settlement with Wall Street brokerage firms. The promotional Webcast was e-mailed to institutional investors on May 2, according to The Wall Street Journal. The paper was the first to report the glitch in a front-page article yesterday. "New York Attorney General Eliot L. Spitzer [D], a primary author of the $1.4 billion settlement, spoke with Bear Stearns Chairman and Chief Executive James E. Cayne and expressed his 'great concern' over the matter, people familiar with the conversation said. Cayne apologized to Spitzer for the incident," The Washington Post reported in a follow-up today. * The Tennessean: Ipayment IPO Raises 31% On Opening Day * The Washington Post: Bear Stearns IPO Effort Draws Fire * Reuters: Bear Stearns Apologizes, iPayment IPO Proceeds

" Pat Shepherd , chief executive of Nashville investment banking firm Avondale Partners LLC , suspects that the SEC held up pricing of the IPO while it looked into whether distribution of a Webcast featuring the Bear Stearns analyst affected demand for the stock," The Tennessean said today. "The new rules on analysts' conduct for now only applies to the large brokerages that signed on to the settlement, Shepherd said, adding complications could arise if an IPO is being managed by underwriters including those who are not parties to the agreement."

The Journal noted the irony in timing of the gaffe: "Days after agreeing to a sweeping settlement aimed at overhauling the way Wall Street does business, Bear Stearns Cos. reverted to the practice of using an analyst to promote a new stock offering. When questions about the episode were raised by The Wall Street Journal, Bear Stearns took the embarrassing step of delaying the initial public offering of stock in credit-card-processing firm iPayment Inc., and the securities firm said it would bar the analyst from covering iPayment. Bear Stearns also called the Securities and Exchange Commission and the New York Attorney General's office to tell them about the incident and apologize. ... The appearance in a promotional Webcast of the Bear Stearns analyst, senior managing director James Kissane, is sure to reinforce regulatory concern that Wall Street firms aren't sufficiently contrite in light of the recent research disclosures and settlement." * The Wall Street Journal: Bear Stearns Used Analyst To Tout IPO Despite Pact (Subscription required)

In a separate article today, the newspaper said that while iPayment's IPO "got a warm investor reception Monday. But the launch of the first IPO in the U.S. market in two months underscored regulatory gray areas about what stock analysts can say in Wall Street's marketing of new issues." * The Wall Street Journal: An IPO Soars 31%, And Debate Rages (Subscription required)

Last week, DigitalNet Holdings of Herndon, Va., yanked its IPO after its lead underwriters got cold feet on the deal due to the lagging market conditions.

IPO Revival on the Way?

Meanwhile, as the IPO market remains weak at best, some chief executives are optimistic about a revival, according to an Ernst & Young survey released yesterday. The survey was of senior executives and chief executives at the company's recent IPO-related retreat. Fifty-four percent of those surveyed said they would "invest in additional people and technology for compliance," to new corporate governance regulations, and 70 percent of the attendees surveyed said uncertainty over how to apply the new regulations was a major concern. Sorry, no link to the report was available as of Filter's deadline time this morning.

It's All Just Fun And Games

The Electronic Entertainment Expo ( E3 ) trade show kicks off tomorrow in Los Angeles, but there's already a sneak peak of what some companies plan to show off at the conference. Microsoft 's Xbox division said yesterday that gamers will have many new ways to tap into their Xbox Live service -- through cell phones, PDAs and more, The Seattle Times reported. * The Seattle Times: E3: Microsoft Plays Up Xbox Hookups