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Non-Tech : The ENRON Scandal -- Ignore unavailable to you. Want to Upgrade?

To: Mephisto who wrote (3831)	4/11/2002 4:30:15 PM
From: Mephisto	Respond to of 5185

Merrill Shares Fall, Court Deadline Looms The New York Times April 11, 2002 By REUTERS Filed at 11:55 a.m. ET NEW YORK (Reuters) - Shares of Merrill Lynch & Co. Inc. (MER.N) fell more than 5 percent on Thursday as the Wall Street firm faced an evening court-imposed deadline to disclose its investment banking relationships on its widely circulated research reports. A state Supreme Court justice on Monday granted Merrill a three-day stay -- which expires at 5 p.m. (2100 GMT) -- after the New York attorney general slapped the nation's largest brokerage with restrictive measures for its research. Merrill shares slid $2.60, or nearly 5.11 percent, to $48.32 in late morning trade on the New York Stock Exchange. The shares were among the most active issues on the NYSE. A Merrill spokesman was not immediately available for comment on the firm's plans, but Merrill previously denied the allegations against it. The brokerage sector's shares took it on the chin with Merrill on Thursday, reflected by a 3.17 percent drop in the Amex Broker-Dealer Index (.XBD). The dramatic fall in Merrill's shares represent the best buying opportunity since the end of September, said analyst Dave Trone of Prudential Securities. Merrill shares hit a 52-week low of $33.50 on Sept. 21, in the wake of the World Trade Center attacks. ``The presumed consequences that are being priced in (to Merrill shares) are overblown,'' Trone said. Even if Merrill is forced to pay a penalty of some sort, it would not have a lingering effect on its business, he said. ``Fines and financial penalties get shrugged off as one-time items,'' Trone said. The attorney general, Eliot Spitzer, on Monday obtained a court order requiring Merrill to disclose potential conflicts of interest in its research reports. Spitzer's office said a 10-month investigation showed Merrill analysts boosted stocks in public, but disparaged them in private. A spokeswoman for Spitzer's office was not immediately available for comment. Spitzer has charged that Merrill's Internet unit, headed by star analyst Henry Blodget, tailored its research to attract investment banking business like stock underwriting and merger deals. The attorney general has refused to rule out the possibility of criminal sanctions, which could prove devastating for a business that is based on trust, as evidenced by the woes of accounting firm Andersen. Spitzer has said he requested the court order against Merrill after he and the firm failed to reach a settlement, which could have included Merrill spinning off its research group as a separate entity. Spitzer has also subpoenaed Merrill rivals, including Goldman Sachs Group Inc. (GS.N), Credit Suisse First Boston, Morgan Stanley (MWD.N) and Lehman Brothers Holdings Inc. (LEH.N), The Wall Street Journal reported on Thursday. Morgan Stanley shares fell $2.29, or 4.2 percent, to $52.22 in late morning trading on the NYSE. nytimes.com