Regulatory agencies tend to be captive of the industries they regulate, and in particular, the largest companies in those industries. Historically, it has been very rare to find a regulatory agency enforcing regulations on behalf of the public interest. At the very best, we can only expect to see effective enforcement actions when some of the bigger players are hurt. Don't expect much, particularly from the current SEC (and the previous one, except for the FD rule, wasn't much better).
A lot of the "regulation" in these industries MUST come from the individual investor, who simply cannot afford to take a recommendation coming from a brokerage firm or investment house at face value. One must assume that no major firm would broadcast its recommendations unless it had already taken action previously on its own behalf (and at better prices). I would suggest that anyone who reads a recommendation coming from an analyst tied into some institutional investment organization should ignore the recommendation unless the analyst shows both sides of the story. That is, as a matter of good journalism, not just good research, it is necessary to show the favorable and unfavorable points as well as the alternatives to a recommendation. If the recommendation doesn't include the good, the bad, and the alternatives, just ignore it.
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