To: Glenn D. Rudolph who wrote (128722 ) 7/21/2001 4:51:40 PM From: H James Morris Read Replies (1) | Respond to of 164684 >The "whores" and "sluts" of Wall Street should be taken out of society and placed in prison Glenn, I love you man! Btw Its "sluts" and "pimps", lets not get rude on this thread.:O) >REUTERS July 21, 2001 NEW YORK -- Merrill Lynch and Co. Inc., the No. 1 U.S. brokerage, paid $400,000 to settle allegations that overly bullish research by its top Internet analyst, Henry Blodget, caused a client to lose his shirt, and the investor's lawyer vowed yesterday to go after other high-profile Wall Street analysts."We are now looking at Mary Meeker and Jack Grubman," said Jacob Zamansky of the New York law firm Zamansky and Associates, who represented the investor in arbitration proceedings at the New York Stock Exchange. "We have clients that have asked us to bring claims." Analysts who made ill-timed calls on stocks that cost investors money in the high-tech bust need not worry too much, experts said. The case against Merrill was an arbitration proceeding and cannot set legal precedent, they said. The plaintiff had asked for $10.8 million in damages and losses. Still, the settlement opens the floodgates for disgruntled investors looking for scapegoats and financial redress. "Copycat litigation is a very frequent event," said Jack Coffee, a Columbia University Law School professor. "This particular success is likely to draw a lot of imitation. There are a lot of other investors who can say the same thing as this investor did." Merrill Lynch did not admit to any wrongdoing. "The matter was resolved to avoid the expense and distraction of protracted litigation," a Merrill Lynch spokesman said. All claims with respect to Blodget as well as Blodget himself were dismissed from this case, the spokesman said. Meeker, who once was known as the "Queen of the Internet," is Morgan Stanley's top Web analyst. Grubman is top telecom analyst at Citigroup Inc.'s Salomon Smith Barney brokerage unit. Morgan Stanley declined to comment, while Salomon Smith Barney, for its part, said: "Our analysts provide a very valuable service." Grubman and Meeker were not available to comment. Meeker and Grubman are among high-profile analysts whose stars have fallen as their stock picks slumped. They have been accused of putting out overly upbeat research reports and touting companies that gave their firm other business such as loans or stock offerings. Wall Street in June agreed on a set of ethical guidelines to prevent such conflicts. Zamansky represented Debasis Kanjilal, a New York pediatrician who said he lost $500,000 in his Merrill account after his InfoSpace Inc. holdings cratered. Kanjilal had earmarked the money for his daughter's New York University tuition, he told Reuters in an interview. Blodget had been bullish on InfoSpace, even as it started slipping from its record high of $132 in March 2000. The stock closed at $3.16 yesterday. Kanjilal also invested in JDS Uniphase Corp. on Merrill's recommendation and lost $300,000, the claim said.The claim said Blodget came up with newfangled ways to value stocks, that inflated the prices of stocks and helped Merrill win investment banking business from companies. "Blodget 'cheerleads' for Merrill Lynch's investment banking division and applies newly minted 'valuation criteria' to reach valuation levels to justify widely inflated price targets and 'buy' recommendations for Internet and technology companies with no profits expected for years," the claim said. Wall Street has come under fire for putting "buy" recommendations on stocks in order to win lucrative business helping companies with mergers or selling stock to the public. Firms adopted the ethical guidelines to deflect criticism that there are holes in walls between research and investment banking units, said James Cox, a professor of corporate and securities law at Duke University. "What I sense the industry is trying to do with recent pronouncements is they are just trying to get ahead of the curve before the NASD does something, and possibly Securities and Exchange Commission investigates," Cox said.