Eliot Spitzer has raised a question that will occupy the financial
industry for some time. Enron had the markets worried. Now the New
York attorney general has added to investors' concerns. Just when
Wall Street buyers were wondering whether the financials they
analyzed were lies, Spitzer reminded them that the research they
were reading could be bogus, too.
Private emails written by Merrill Lynch analysts castigating the
stocks they were recommending to investors have brought into
question the integrity of research everywhere. In a bear market,
conflicts of interest that had been an accepted way of life for
decades are no longer acceptable.
Critics say analysts recommended dubious stocks during the tech
boom because their firms aimed to win investment banking work from
the companies they covered.
So far, the US firms under Spitzer's gaze have been disposed to
accept some changes to the rules governing research. Merrill Lynch
has agreed...
