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Strategies & Market Trends : The Final Frontier - Online Remote Trading
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To: TFF who wrote (10184)5/7/2002 9:47:21 PM
From: Bob Kim  Read Replies (1) of 12617
 
I don't think the NYAG wants to take them to court because it might bring the whole house of cards down(meaning if they press criminal charges the firms might follow the Arthur Anderson path into oblivion).

It's funny that an investigation that currently encompasses about 1% of the analysts in Merrill, casts a pall on the other 99% and extends to the rest of Wall Street. Merrill's decision to defend Blodget at seemingly all costs suggests that they might want to portray him as acting no different than the others, but the reality is he was an outlier versus most of Merrill's analysts.

I think his goal is to stick it to them hard and seperate research and investment banking once and for all.

The separation of research and banking would likely have had little affect on making Blodget's research better. That goal may be misplaced. Blodget, as suggested by the affidavit, seemed somewhat clueless about the firm's rules and regulations. Yet it also appears that the firm did little to rein him in despite questionable actions (such as recommending a client's IPO to the financial press before the IPO took place) on his part even early on in his Merrill career.

He knows they face lengthy class action lawsuits which will cost them enough in lost reputation and settlements.

Extracting an admission of wrongdoing would likely help those suits, but many seem to be reliant on the all encompassing "conflict of interest" argument, a weak one, in my opinion.

Assuming Merrill caves to his settlement demands it will be interesting to see if the other firms sign on, or wait to see what evidence NYAG uncovers.

I wonder if some of the firms resent the extra regulation they will face because of the actions of a competitor.

The new rules of the game will be around alot longer than the current crop of players will be.

If some of the current rules had been enforced, we might not be having this discussion.
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