Investment bankers on Wall Street are braced for a wholesale investigation into the excesses of the industry during the IPO boom of the late 1990s, after the revelations last week by Citigroup concerning the allocation of shares in hot deals to big corporate clients.

The size of the allocations, with WorldCom executives making a combined $9.2m (€9.5m) on the shares they received in the IPOs, has raised the prospect of a formal investigation into the entire industry. John LaFalce, a member of the US House Financial Services Committee, which is investigating Citigroup's role in the collapse of WorldCom, has called for the investigation to be widened to include "conflicts of interest created by the involvement of analysts in their firms' investment banking business".