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To: Jim Willie CB who wrote (39698)	8/2/2001 1:03:44 PM
From: stockman_scott	Respond to of 65232

Media Grok: Don't Blame Me, I Listened to Mary Meeker Thursday August 2, 11:35 am Eastern Time TheStandard.com By Jen Muehlbauer A new round of the analyst blame game began Wednesday, when Morgan Stanley analyst Mary Meeker was hit with two lawsuits. Some investors say Meeker "offered biased research and slanted investment advice about eBay and Seattle-based Amazon as a way to secure lucrative banking business for Morgan Stanley," according to Bloomberg. Amazon and eBay, no strangers to lawsuits, are staying out of this one. This isn't the first time analysts have been slammed for being too bullish, possibly at the behest of investment banking clients, like, say, Amazon and eBay. Nor is it the first time we've heard that analysts get paid more for drumming up banking business for their firms - this might explain Meeker's supposed 1999 pay of $15 million. Analysts are under the microscope right now, and Merrill Lynch recently settled arbitration against famous bull Henry Blodget. Unlike the Blodget arbitration, the cases against Meeker and Morgan Stanley are "designed to go to court," said the New York Daily News. Morgan Stanley dismissed the suits as a publicity stunt, calling them "little more than an attempt to grab headlines by naming a prominent figure as a defendant." It may not be a coincidence that these suits were filed the day after a congressional hearing that gave analysts the what-for. The SEC revealed that that 30 percent of analysts owned pre-IPO shares of companies they covered. Plus, "only one of the nine major underwriting firms was able to supply the SEC with a list of analysts who owned pre-IPO shares," said the Motley Fool. "Several of the analysts who held pre-IPO shares sold them while maintaining their 'buy' rating." Not nice. Testimony from TheStreet.com's Adam Lashinsky suggested that financial journalists like himself aided and abetted analysts' wrongdoing. CNBC always plugged stocks "because rising stocks meant greater viewership," he said. TheStreet.com pointed out analyst conflicts, Lashinsky said, but "at the same time we did our share to hype the momentum stocks of the era." For obvious reasons, we don't expect to see much coverage of this angle. TheStreet.com gets points for publishing the testimony in full. Another of Lashinsky's points, the inability of clueless investors to properly analyze the analysts, was supported by a phone survey conducted by investment groups. The AP reported on individual investors' areas of ignorance, from margin calls to limit orders. "Fewer than one in five investors polled knew there is no insurance to cover stock market losses or losses from investment fraud," wrote the AP's Marcy Gordon. "Nearly two in three respondents did not know what to do first when they suspect they are dealing with a problem broker." Other than filing lawsuits, no one seems to know how to handle problem analysts, either.

To: Jim Willie CB who wrote (39698)	8/2/2001 2:08:51 PM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

Here's another sign of a weak economy... _______________________________________ Pricewaterhouse Consulting Is Planning Further Layoffs By JONATHAN D. GLATER August 2, 2001 Nytimes.com The consulting arm of PricewaterhouseCoopers warned employees of another round of layoffs yesterday, primarily in its United States offices, affecting as many as 800 people, or 5 percent of its consultants and support staff. The move by PricewaterhouseCoopers, one of the world's big accounting and consulting firms, is an effort to cut costs in response to sharply declining demand by clients for consulting services, Pricewaterhouse executives said. Analysts said that while all consulting firms face difficult times, PricewaterhouseCoopers seems to be in a particularly awkward place. This is its second round of layoffs — the first one in the spring affected about 1,000 employees — and the direction of the consulting unit, which was almost sold to Hewlett- Packard late last year, is unclear. Mike Collins, managing partner of the Pricewaterhouse consulting arm for North America, said in a telephone interview yesterday: "Unfortunately, the costs of consulting have grown as a result of the strong economy of recent years, and have not yet been reset to reflect the current environment. We're basically doing the same thing we would tell our clients to do." PricewaterhouseCoopers will reduce base compensation for both junior consultants and partners by 5 to 10 percent, Mr. Collins said. In addition, a greater portion of employees' salaries will depend on individual and team performance. The salary reductions and layoffs will take effect over the next few months. The firm will also cut back recruiting efforts on college and business school campuses this fall, and has asked recent graduates who were to begin work in the fall to defer their starting dates. Pricewaterhouse will tell prospective employees by April 2002 whether and when they may start work, a spokeswoman said. The changes are "reflective of PWC's position right now in the marketplace," said Tom Rodenhauser of Consulting Information Services in Keene, N.H. The PricewaterhouseCoopers consulting arm, he said, is not as big as Accenture or IBM (news/quote) Global Services, both technology services consultants, but is not a traditional division of an accounting firm, like Deloitte Consulting or Arthur Andersen's consulting business, either. Some of the changes might also be preparation for a transaction involving the consulting business, several analysts said. Indeed, Pricewaterhouse's Mr. Collins said the firm still planned either a public offering for the consulting unit or a sale to an outside buyer, but he did not give a timetable. "We're not interested in doing a fast transaction if it's not the right transaction," he said. Over all, the consulting business is suffering from the slowdown in the economy, which has led companies in a variety of industries to cut back spending. Growth in revenue at the 50 highest-grossing consulting firms fell last year to 11.7 percent from 19.7 percent in 1999, according to Kennedy Information, which tracks the industry, and consultants at several firms say privately that growth has fallen further this year. "The big guys are all hemorrhaging," Mr. Rodenhauser said. "The business turned so sharply and they were caught with so much overcapacity that it was inevitable that they would have to cut."