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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: dawgfan2000 who wrote (13446)	8/1/2001 2:14:01 PM
From: dawgfan2000	Read Replies (2) \| Respond to of 52237

>>I was watching NBR last night covering the hearings on brokerage houses. One commentator was more worried about the analysts being seen as the scapegoats for the decline rather than holding them accountable for their calls!! UFB! << Edit: it was a congressmen! 07/31/01: The Blurred Line For Brokerages Between Research & Reward LINDA O'BRYON: The Securities and Exchange Commission told Congress today brokerage firms are doing a poor job policing their stock analysts. SEC Acting Chairman Laura Unger says some of the biggest firms on Wall Street aren't following their own rules about monitoring employee investments. Darren Gersh reports. DARREN GERSH, NIGHTLY BUSINESS REPORT: Acting SEC Chairman Laura Unger told Congress the line separating stock selling from stock research on Wall Street has blurred as brokerage firms rush to cash in on the bull market boom in initial public offerings. LAURA UNGER, ACTING SEC CHAIRMAN: Firms really looked for ways to compete to get that IPO business. Part of the way they began competing was to include in the mix the analysts and having favorable analyst coverage was able to stabilize or enhance the stock price performance of the company. GERSH: An SEC examination of nine of the largest firms underwriting IPOs found one of four stock analysts owned shares in companies they covered. All of those investments were made before the companies sold shares to the public. Twenty-six of the 96 analysts reviewed issued so-called booster shot "buy" recommendations just before the lock up period expired, which prevents insiders from selling their shares. The SEC identified three stock analysts who sold shares while maintaining a "buy" recommendation on companies they covered. Members of Congress were told one of those analysts made $3.5 million selling his shares. REP. RICHARD BAKER, CHAIRMAN, SUBCOMMITTEE ON CAPITAL MARKETS: I find it frankly appalling that someone could tell me to "buy" while they're selling in the back room, profiting off my investment. GERSH: Unger said the SEC is investigating whether those analysts may have violated securities laws. But the SEC also found the nine brokerage firms it examined did not know how many shares stock analysts owned in companies the firms later took public. UNGER: The firms need to do a better job of ensuring compliance with their existing policies and procedures, most of which exist at the firms that were inspected, most of which are not being enforced enough. GERSH: One congressman at today's hearing said he's concerned analysts are becoming scapegoats for the falling market. But many other members at today's hearing said they're now convinced there needs to be greater consequences for firms that fail to ensure the integrity of their stock analysts. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington. O'BRYON: Well, it looks like the code red worm computer virus has already begun to attack. Security experts say a few infected machines with incorrectly set dates have started trying to spread the worm. It's programmed to go off tonight at 8:00 P.M. Eastern Daylight Time, making servers spew junk data onto the Internet, slowing it down. The virus like program affects Microsoft's Windows NT and 2000 server operating systems. Microsoft's Web site offers a patch to fix the problem. The company says it has been downloaded by hundreds of thousands of users, Paul. nightlybusiness.org