Merrills Wins Time To Settle

The securities firm has now been given until April 19th to work out an arrangement which will satisfy Spitzer.

At the heart of the matter is Spitzer's claim that research analysts may well paint too rosy a picture on a company or financial institution which is also a client of another part of the organisation.

Spitzer also fears that analysts may be disinclined to reveal bad news for fear of jeopardizing a relationship with others in the firm and putting potentially huge investment banking advisory fees at risk.

Merrill is looking for a way to reassure the New York State Attorney General without disadvantaging itself in the market. The firm is looking to disclose to the public what investment banking related work it is undertaking with orgainizations covered by its research analysts. But this needs to be done delicately so as not to prejudice client confidentiality and prevent Merrill from doing business.

As the probe into this issue is soon to be extended to other Wall Street firms, it is unlikely that Merrill will be at a disadvantage for long.