Eliot Spitzer, New York attorney-general, has extended his probe into the probity of the share-dealing industry [WAMN: 09-Apr-02].
Although the inquiries are not specifically related (as far as is known) to the advertising and marketing sectors, many agencies have nursed burned fingers from the antics of the stock market manipulators, unfondly referred to by WAMN as ‘entrail-rakers’ (although this is less a reference to their probity than their accuracy).
Among the latest crop of investment banks to come under Spitzer’s spotlight (alongside Merrill Lynch) are Credit Suisse First Boston and Morgan Stanley. They have been ordered to disclose documents that could reveal possible conflicts of interest between analysts and investment bankers, creating what could prove a once-in-a-lifetime opportunity for shredder salesmen.
As to whether criminal prosecutions might follow, Spitzer was guarded. “This is a treasure trove of irrefutable evidence,” he said. “The entire range of possibilities is there.” But New York securities lawyer Jacob Zamansky, who has represented shareholders against brokerages, believes Spitzer will prosecute.
“I think it's a case where we might see criminal charges and possibly jail time for conflicted analysts,” Zamansky opined adding, in the understatement of the 21st century: “It would send a strong message.”
Data sourced from: Financial Times; additional content by WARC staff