Analysts' Comp Key To Wall St Settlement

10 years ago

Bloomberg reports that New York state attorney general Eliot Spitzer wants Merrill Lynch and other brokerage firms to agree to separate analysts' compensation from investment banking. He believes that this issue is key to reestablishing the integrity of the market and feels that it will go a long way to ensure that there is no repeat of the allegations that Wall Street firms issued 'biased' or 'over optimistic' stock research to clients.

Spitzer's current initiative will come as a relief to many on Wall Street. Many were skeptical that his idea of separating research and investment banking altogether was vialble and that it could potentially harm the capital markets.

US Securities & Exchange Commission chief, Harvey Pitt, called the idea 'a very drastic remedy' last week and 'only as a last resort.' Spitzer has now said that breaking up the firms is not his objective and is quoted by Bloomberg as saying: 'We have to craft something that works.'

Meanwhile Spitzer continues to attempt to reach a settlement with Merrill Lynch, who wish to avoid possible criminal charges in connection with its research.

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