PeterR1700:
Here is a case where Kaufman Brothers pushed a stock that
collapsed with a consequent lawsuit against the management for selling out around $20 prior to stock dropping to $8
securities.stanford.edu
<<<< During mid-April 1996, IMP officers Carrington, Laws and Isherwood had discussions with a securities analyst named LaFountain of Kaufman Brothers who was writing a report on IMP, providing
him with very favorable information about IMP, telling him that demand for IMP's product was strong,IMP's backlog was growing and the Company expected to earn $.20 per share in 1996 and $.40 per
share in 1997.>>>>
<<<<< As a result, on April 25, 1996, LaFountain of Kaufman Brothers issued a report on IMP which recommended purchase of IMP's stock and forecasted earnings of $.20 per share for fiscal
1996 and $.40 for fiscal 1997, stating that recent conversations with management indicated that "[theCompany's] business trends continue at strong levels," especially driven by the secondary storage
business. IMP also reproduced and distributed the Kaufman Brothers' report to other analysts, the financial press and prospective investors. On April 25, 1996, IMP's stock surged another $2-1/8 per
share to close at $15, on volume of 18.1 million shares. >>>
SES |
