redherring.com
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Public enemy No. 1 in the analyst community this year is Merrill Lynch's bullish Internet golden boy, Henry Blodget. After failing to downgrade any of the stocks that he covered until after they had lost an average of 63 percent of their value, Mr. Blodget became a popular target of venomous attacks on countless stock message boards. It was Mr. Blodget's refusal to downgrade InfoSpace (Nasdaq: INSP) -- a wireless portal company based in Bellevue, Washington -- even as the stock plummeted 91 percent last year, that Debases Kanjilal, a 46-year-old pediatrician in New York, blames for his losses of $518,000. Now Mr. Kanjilal is intent on holding Mr. Blodget personally responsible for his loss; he filed an arbitration suit against him in March with the New York Stock Exchange.
"Henry Blodget is the poster boy of conflicted analysts who reaped huge investment banking and brokerage fees by pumping up the tech bubble and then leaving the investing public holding the bag," says Jacob Zamansky, Mr. Kanjilal's attorney in the case. "Blodget and other analysts must be held personally accountable."
In his suit, Mr. Kanjilal claims that Mr. Blodget remained overly positive on InfoSpace because Merrill Lynch was acting as a financial advisor in InfoSpace's acquisition of Go2Net, a Web portal company in Seattle, Washington. Mr. Kanjilal is seeking $10 million in punitive damages and $800,000 in compensatory damages.
Merrill Lynch disputes Mr. Kanjilal's allegations. "Our analyst research was not compromised," says Joe Cohen, a Merrill Lynch spokesman. "Stock recommendations are just that: recommendations. This was an experienced investor who ignored our advice and followed a very aggressive, risky strategy," Mr. Cohen says of Mr. Kanjilal. A hearing date for the arbitration case has been set for February 2002.
I don't get it levy....he loses 518k, so he sues for 800k + 10 million ? I hope this one makes it on Judge Judy so I can watch. |
