US end of retirement again

Carl Remick carlremick at hotmail.com
Tue Apr 9 07:59:18 PDT 2002


[From the Wash. Post -- arguably, this is as much dog-bites-man news as items I've earlier posted under this subject heading. But while there's never any reason to doubt Wall St.'s determination to screw the average investor, rarely has there been such lurid evidence, it appears, of this commitment. Good ol' e-mail.]

Analysts Accused of Touting 'Junk' to Boost Profits

Merrill Lynch E-Mail Shows Firm Pushed Bad Investments on Clients, Chief N.Y. Prosecutor Says

By Robert O'Harrow Jr. Tuesday, April 9, 2002; Page E01

NEW YORK, April 8 -- A trove of internal e-mail from one of Wall Street's biggest investment banks shows that analysts promoted struggling technology companies they didn't believe in while the bank earned fees selling the firms' stock, the state's attorney general alleged today.

At the height of the technology bubble, Henry Blodget and other Internet analysts at Merrill Lynch & Co. issued glowing reports about companies that would later crash, while privately deriding the stocks to one another in salty, dismissive language.

One company given a top rating by analysts was described in-house as "a piece of junk." Another was called "such a piece of crap," even though analysts in Merrill's Internet group told investors to buy more of it for their portfolios. One analyst worried that regular investors "are losing their retirement" because of the misleading advice.

The documents, filed in court after a 10-month investigation, provides ammunition to critics who question whether the so-called "Chinese Wall" separating analysts, who are supposed to provide independent advice, and investment bankers, who generate fees by bringing stocks to the market, actually exists, as Wall Street claims.

"As dramatic and damning as this evidence is against Merrill Lynch, it may be the tip of the iceberg," Attorney General Eliot Spitzer said at a news conference.

[http://www.washingtonpost.com/wp-dyn/articles/A16742-2002Apr8.html]

Carl

_________________________________________________________________ Get your FREE download of MSN Explorer at http://explorer.msn.com/intl.asp.



More information about the lbo-talk mailing list