Eric, more on "analyst" research and JPMorgan (Ed Snyder and company). I Believe Marc Cabi's firm, CSFB, was also indited for the same reasons. Is there anyone else you want to recommend (gg)?
Re:your statement>. "Today restraints on capital are retarding deployment of 3G3 infrastructure. Without that deployment, the deployment of 3G3 handsets in mass volume pushes out further and further and so does hard earned, well deserved, royalty flow to Qualcomm." <<
No doubt that is the main problem Verizon is facing in deploying Ev-Do. However, it has been my understanding that much of the WCDMA infrastructure has been deployed and problems with the WCDMA technology is the main cause retarding commercial deployment of WCDMA and "royalty flow to Qualcomm".
SEC Says JP Morgan Promised Research 'Warranty' to Cos
biz.yahoo.com
Monday April 28, 5:26 pm ET
By Michael Rapoport
NEW YORK -- J.P. Morgan Chase & Co. promised a stock-research "warranty" to some companies and encouraged its analysts to help step up its trading activity on companies from which the firm planned to seek underwriting business, the Securities and Exchange Commission (News - Websites) alleged Monday.
The allegations were contained in the SEC's complaint about alleged research conflicts of interest at J.P. Morgan, one of the 10 Wall Street firms which agreed Monday to a $1.4 billion settlement of allegations that companies slanted their stock ratings to help them win investment-banking business.
J.P. Morgan agreed to pay $80 million as part of that settlement -- a $25 million fine, $25 million in disgorgement, $25 million to pay for independent research and $5 million for investor education. Like the other firms, J.P. Morgan was also required to make significant changes in how its research and banking operations deal with each other.
The SEC alleged that J.P. Morgan provided some companies with an informal " warranty" on its coverage, pledging to investment-banking clients and prospective clients that it would provide research on them for a certain period of time, typically 18 months.
Also, the SEC said, J.P. Morgan predecessor firms Hambrecht & Quist and Chase H&Q paid a total of $1.3 million to other, unidentified broker-dealers for research issued in connection with five deals in which J.P. Morgan was involved as an underwriter. The firm either didn't disclose the payments or didn't ensure that they were disclosed in offering documents, the SEC said.
In addition, the SEC said the firm's analysts were encouraged to "increase their visibility" on specific stocks from which J.P. Morgan was expecting to seek banking business in the near future. The firm's research department and other departments were encouraged to increase trading volume in those stocks to assist J.P. Morgan in winning banking business, the SEC said.
The SEC said some of the "pitch" materials with which J.P. Morgan tried to win banking business suggested implicitly that the firm would provide favorable research coverage of the company after the underwriting deal. For instance, when the firm pitched Participate.com in 2000, the pitch materials identified the analyst who would cover the stock, and showed cases in which other stocks covered by the analyst shot up after the analyst placed them on the firm's Focus List.
The SEC's lawsuit against J.P. Morgan also contains a host of allegations mirrored in most or all of the suits against the other nine firms involved in the settlement. Among them: that compensation for analysts was tied in part to how much underwriting business they brought in, that the company's banking operations had partial supervisory responsibility for research, and that investment-banking considerations affected which companies J.P. Morgan's analysts would cover.
For instance, the SEC quotes e-mails from an unnamed J.P. Morgan analyst in which the analyst said a banker for the firm "lobbied me very actively" to cover International Rectifier Corp. (NYSE:IRF - News) so J.P. Morgan could pursue its banking business. International Rectifier ultimately gave its main banking business to another firm, leading the analyst say later that the firm's head of research " wants to hear that the banking business is locked up. We've been screwed too many times."
A J.P. Morgan spokesman declined to comment on the SEC's allegations.
-Michael Rapoport, Dow Jones Newswires; 201-938-5976; michael.rapoport@dowjones.com |
