LPS5,
I happen to be a Merrill Lynch customer. I pay for their services. One of the things they sold to me was access to their "award winning research and analysis", or some such words as that.
From your earlier reply and question
What I have still not received an answer to is: how do those rules apply to individuals sending emails expressing a personal opinion?
The emails are not a violation of any rules as far as I can tell, but they do tell a story, or so the NY AG says, and he seems to have found ML in a position they cannot defend. Of course it's all second hand to me, but we are not talking here about emails between secretaries, or account assistants or some lower level Financial Consultant saying "This stock is crap, so I don't wish to recommend it to my clients even if my boss or the company thinks it's a good investment and demands that I promote it." The reports indicate that these emails are from the analysts, the people whose job it is to impartially evaluate the strengths and weaknesses of the companies they follow and make recommendations to their clients based on their findings, represented as "Merrill Lynch's objective opinion".
If the internal/personal emails are part of a debate among participants in the research activity, and leave a trail of differences of opinion where one participant sees value in a company, and someone else disagrees and says it's crap, then the "crap" emails are not incriminating. But when the main guy gets all the inputs, and puts it together, and concludes that based on the objective evidence it is crap, then turns around and publishes his opinion, as Merrill's (or any other company) official spokesperson, that it is a solid investment, then that is a willful deception. The emails are only significant to the extent that they demonstrate that what was published and represented as being Merrill's fair evaluation was in fact not their real conclusions.
The opposing constituencies have been pretty well documented with anecdotal evidence of analysts being unwilling to "tell it like it is" because of fear of loss of revenue related to services provided for the company that is supposedly being objectively evaluated on the one hand, and the recipients of the results of the analysts (people like me) on the other.
Whether the analysis is paid for by a recipient or not is really not an issue. You certainly know this better than I, but this is after all a regulated industry wherein nobody is permitted to disseminate false or deceptive information about publicly held companies. Even teenage boys who post messages on the internet are not permitted the excesses of youth when it comes to disseminating information about such companies.
Dan |
