Financial Services Industry
Industry: Email Alert RSS FeedInvestment banks separate stock research after Merrill Lynch settlement. (Following Suit).
Buyside, June, 2002 by Leerskov, Meghan
After Merrill Lynch's settlement with New York Attorney General Eliot Spitzer over conflicts of interest between its research and banking arms, many firms are re-evaluating their research efforts.
In addition to paying $100 million, Merrill agreed to reforms designed to ensure analysts' salaries are not tied to any investment banking business they generate. The investment bank has also created a new rating system. The new system, to be implemented in September, will provide clients with stock recommendations based on projections of total return and risk.
The new rating system will show three dimensions that are important for investors to consider when assessing a stock: the zero to 12-month investment recommendation, the projected risk as measured by...
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