Merrills Accused Of Tainted Advice

Spitzer is conducting an investigation into Merrills and is looking at the relationship between analyst's research and investment bankers who undertake or hope to undertake deals with companies covered.

The New York attorney general has accused Merrill of jeopardizing 'the integrity of the marketplace' and has contended that the firm has misled its brokerage customers to help its corporate clients.

As the New York Times points out, 'every major Wall Street firm publishes research on companies that issues stock and investment bankers are earning or hoping to earn fees for providing advice to those same companies.'

Spitzer is also thought to have served subpoenas on other unnamed Wall Street firms.

Merrills denies the allegations. An executive stated that 'we are outraged that we were not given the opportunity to contest these allegations in court.'

In a related story, Merrills has confirmed that it is moving back to its offices next to the destroyed World Trade Centre. The securities house is hoping that this decision will result in the firm being given more opportunity to underwrite New York City bonds.