Effective, professional, and on top of the process. Special recognition for Tina Morace.
Rafal Konopka
9 months ago
States Are Ready For Broker Probes. States are getting ready for inquiries into possible conflicts of interest between research and financial recommendations at several Wall Street firms following the settlement between New York state Attorney General Eliot Spitzer and Merrill Lynch, a newspaper reported Thursday. The states plan to use the Merrill settlement as a […]
States Are Ready For Broker Probes. States are getting ready for inquiries into possible conflicts of interest between research and financial recommendations at several Wall Street firms following the settlement between New York state Attorney General Eliot Spitzer and Merrill Lynch, a newspaper reported Thursday.
The states plan to use the Merrill settlement as a blueprint for seeking settlements in other cases, the Wall Street Journal reported.
On Tuesday, Merrill Lynch agreed to pay $100 million in fines to settle the questions surrounding the brokerage’s stock ranking methods, but did not admit any wrongdoing. Of the $100 million, $48 million will to go New York, while $52 million will go to all other states. The company also agreed to separate its banking and research practices.
The upcoming investigations into Salomon Smith Barney and Morgan Stanley (MWD: Research, Estimates) will be handled by New York, while that of Credit Suisse First Boston (CSR: Research, Estimates) will be handled by Massachusetts and the inquiry into UBS PaineWebber will be overseen by Connecticut, the report said.
Texas and Alabama will investigate J.P. Morgan Chase (JPM: Research, Estimates) and Lehman Brothers Holdings Inc. (LEH: Research, Estimates); New Jersey will probe Bear Stearns; California will look into Deutsche Bank Securities (DB: Research, Estimates) and Thomas Weisel Partners; Washington state will handle Piper Jaffray; and Utah’s assignment is Goldman Sachs Group (GS: Research, Estimates), the Journal reported.
Each firm will be scrutinized for possible conflicts of interest among its analysts and stock recommendation, including its methods for compensating researchers, the paper said.
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