I do a lot speaking in my job (too much!); I express my opinions through logical reasoning and financial modelling. On occassion, I go on for too long.

Not today. For a change, I'll let someone else do the talking.

As you follow the links below, be sure to note the dates of these commentaries; What is really telling is that many of these stories are 2, 3 even 4 years old. Included herein are some of the most astute people in the industry. They will explain -- far more eloquently than I -- exactly what's wrong with Wall Street . . . (Note: The most significant articles are the first few under each heading)

April 23, 2002

General Problems

Investment Banking & Conflicts of Interest
How Banking Fees Corrupt Wall Street Michael Lewis, Bloomberg
The Price of Being Right David Rynecki, Fortune
Wall Street's Den of Thieves John Ellis, Fast Company
Dealmaking Challenges Analyst Integrity Barbara Etzel, Investment Dealers’ Digest
Say It in English! Please! Andy Serwer, Fortune
Tired of Stock Answers? Ben White, Washington Post
How conflict of interest pays Elizabeth Knight, The Sydney Morning Herald
The Great Internet Money Game Peter Elstrom, BUSINESSWEEK
Are All Consultants Corrupt? David Maister, Fast Company
Wall St.'s conflict-of-interest crisis Bambi Francisco, CBS.MarketWatch.com
The Valuation Mystery That Fueled The Internet Stock Bubble Nike Scevak, Australia Internet.com

Enforcement
Where Are the Cops? Nasdaq Has Become a Big Swindle Shop Christopher Byron, NY Observer
Is the SEC Corrupt or Merely Incompetent? Michael Lewis, Bloomberg
Investigators Should Target Mutual Funds Next James Cramer, TheStreet.com
Hearings Expose Analysts' Abuses Brian Lund, The Motley Fool
U.S. probing stock analysts Rex Nutting, CBS.MarketWatch.com
SEC turns up heat on analysts Thor Valdmanis, USA Today
N.Y. Plans To Query Analysts In Public Robert O'Harrow Jr., Washington Post
The Whole Story? Steven Pearlstein, Washington Post
12 States Join N.Y. Probe of Wall Street Ben White, Washington Post
SEC Says Analyst Conflicts Exist - and Gets Dinged for It Megan Barnett, The Industry Standard
SEC Launches Inquiry into Research Conflicts SEC Press Release
(On April 25, 2002, the SEC announced they have FINALLY joined the investigative efforts)

Politics and Enforcement
The Structure of Reform: What Spitzer Might Want Rebecca Byrne,TheStreet.com
The SEC and its Chairman Editorial Comment
Harvey Pitt's Credibility (Paid subscription required)
Lawmaker blasts New York prosecutor Matt Andrejczak, CBS.MarketWatch.com
(The SEC's belated investigation was instigated by the NYAG's action; What's really motivating this Congressman?)

Media
Rah-rah CNBC had the suckers going for a ride Martha Smilgis, The San Francisco Examiner
Don't Believe the Hype Anne Kates Smith, Kiplinger's Personal Finance
Financial journalists take a licking Bill Barnhart, Chicago Tribune
Wall Street's Self-Serving Advice! Sy Harding, STREET SMART Report
Games Wall Street Plays Elizabeth Frengel, Kiplinger's Personal Finance
The Analyst Paradox: If They’re So Plagued With Conflicts, Why Do They Do a Such Good Job? James Glassman, Washington Post (Washington Post columnist defends analysts in Congressional testimony)

IPOs
Betrayal on Wall Street Shawn Tully, Fortune
How Wall Street's storied Chinese wall failed investors Richard J. Newman and Peter Basso, US News & World Report
After the wild IPO ride, some say winnings rigged Deborah Lohse, Mercury News
Equity at Last? Christopher Byron, Forbes ASAP
Dot Con Frontline, PBS
IPO Scandal Timeline

Corporate Complicity
The Crisis in Corporate Governance Business Week Special Report
Companies should view disclosure as opportunity Dan Gillmor, San Jose Mercury News
Just Say No To Guidance Geoffrey Colvin, Fortune
What Europe can teach Uncle Sam Will Hutton, The Guardian
Tell the Good News. Then Cash In David Leonhardt, New York Times
Sorry, Wrong Number George Mannes, TheStreet.com

Who are big Financial companies loyal to?
How Much Do Brokers Have to Hide? Janice Revell, Fortune
The Man Who Paid the Price for Sizing Up Enron Richard A. Oppel Jr., New York Times
Calling for Big Firm break ups Adam Lashinsky, CNN Money
Dirty Little Secrets of the Fund Game Dagen McDowell, TheStreet.com
Mutual fund losses stagger investors John Waggoner, USA Today

Analysts
Wall Street Prophets Scott Pelley, CBS News
It's time to repair Wall Street's dubious research machine Michael Santoli, Barron's
Is Jack Grubman the worst analyst ever? Amy Feldman and Joan Caplin, Money Magazine
The Buy Side Wakes Up Rich Blake and Justin Schack, Institutional Investor
Worthless Experts Just Kept It Quiet Christopher Byron, NY Observer
Analysts Business Week Special Report
Can Wall Street Analysts be Fooled? (You bet!) TurtleTrader.com
Holding Analysts Accountable Eileen Buckley, The Industry Standard
Analyzing the Analysts Thomas Coyle and Stefani Lako Baldwin, Upside
Hear No Risk, See No Risk, Speak No Risk Bethany McLean, Fortune
Next crash? Sorry, you'll never hear it coming [from analysts] Dr. Paul B. Farrell, CBS.MarketWatch.com
Tech Stock Analysts Face Scrutiny Over Changing Role Nora Macaluso, E-Commerce Times
What Do Financial Advisors Really Know? Mark Weisbrot, Center for Economic and Policy Research
Merrill to Expand Disclosure Policy Ben White, Washington Post
ANALYZING THE ANALYSTS Testimony, Subcommittee on Capital Markets, U.S. House of Representatives
Wall Street faces prospect of criminal charges David Teather, The Guardian
Are Analysts Playing Us for Suckers?
Taming the Renegade Analyst

Ethics
Where Has Corporate Integrity Gone? Whitney Tilson, The Motley Fool
Merrill Arms Staff With Cheat Sheet To Deal With Analyst Debacle Lisa Gewirtz, Institutional Investor
Wall Street's Discovery of Ethics Is Too Little, Too Late Adam Lashinsky, TheStreet.com
Wall Street Gets Ethics Dan Ackman, Forbes

Merrill Lynch & Morgan Stanley
(MER & MWD are the best example of the conflicts of interest endemic to all of the big wire houses)

Merrill Investigation History
Was Henry Blodget an Evil Genius? Rob Walker, Slate.com
How Merrill's Old E-Mails Transform the 1990s Michael Lewis, Bloomberg
New York goes after Merrill Lynch Allen Wan & August Cole, CBS.MarketWatch.com
Merrill accused of tainted stock picks Reuters
MERRILL LYNCH STOCK RATING SYSTEM found biased by undisclosed conflicts of interest NYS Attorney General Eliot Spitzer
Wall Street Inquiry Expanded, With a Subpoena to Salomon Gretchen Morgenson, New York Times
Merrill Lynch Under Attack as Giving Out Tainted Advice Patrick McGeehan, New York Times
Live by the Net, die by the Net David Callaway, CBS.MarketWatch.com
Merrill Lynch's Not-So-Sweet Buy and Buy Jerry Knight, Washington Post
Mopping up after Merrill Lynch Eric Hellweg, CNN/Money

Merrill's Mea Culpa
Merrill Chief Is Apologetic Over Analysts; One Dismissed Patrick McGeehan, New York Times
Merrill apologizes to shareholders Nicole Maestri, CBS.MarketWatch.com

Merrill's sacrificing retail clients for fees
Relentless Search for Growth Humbles a Mutual Fund Star Patrick McGeehan, New York Times
Fallen fund manager stars Martine Costello, CNN/Money
Mutual Fund Manager at Merrill Plans to Accept Buyout Offer Patrick McGeehan, New York Times

Morgan Stanley's Mary Meeker
Where Mary Meeker Went Wrong Peter Elkind, Fortune
Don't Blame Me, I Listened to Mary Meeker Jen Muehlbauer, TheStandard.com
Want to sue over bad stock advice? You're not alone Larry Dignan, CNET Investor
Morgan Stanley Sued Over eBay and Amazon Dealings Elizabeth Blakey, EcommerceTimes

Enron

Enron (and Wall Street)
The Enron Nine William Greider, The Nation
Houston, we have a problem Katharine Mieszkowski, Salon
At Center of Enron Bankruptcy, Dispute Over Big Bank Creditors Leslie Wayne, New York Times
Understanding Enron's Collapse Washington Post
The Man Who Paid the Price for Sizing Up Enron Richard A. Oppel Jr., New York Times
Wall Street Analyst Faulted on Enron Richard A. Oppel Jr., New York Times
Enron: Too Serious For A Scandal Dick Meyer, CBSNews.com
Enron probe targets Wall Street BBC News
A Scandal for our Time Sean Wilentz, The American Prospect

Enron (and Politics)
GAO V. CHENEY IS BIG-TIME STALLING John Dean, former Counsel to the President
THE ENRON COLLAPSE Memo details Cheney--Enron links David Lazarus, San Francisco Chronicle
W & Enron Do the Numbers Alike Richard Cohen, New York Daily News
Law changes may hurt former Enron employees Gary Reaves / WFAA-TV News, Dallas
How Enron bought the GOP in Texas Kelly Fero, Enron Owns the GOP.com
Enron’s Campaign Contributions and Lobbying Steven Weiss, Center for Responsive Politics

Further Reading
Fortune Tellers: Inside Wall Street's Game of Money, Media, & Manipulation by Howard Kurtz
The Pied Pipers of Wall Street: How Analysts Sell You Down the River by Benjamin Mark Cole
Wall Street: How It Works and for Whom by Doug Henwood

One last item: I cannot place ALL of the blame on Wall Street, the SEC's lack of seriosu enforcement and the "rah-rah" Media; There is another crucial party complicit in this; This group has not yet been taken to task: the individual investor.

I do not believe much of the nonsense discussed above would have been possible without the arrogance, greed and total irresposibility by many, many retail market participants.

My final link, therefore, will come from a different perspective to much of what is discussed above: "Taking Responsibility." It discusses how some are using all the latest scandals -- Enron, Merril Lynch, etc. -- as a way to blame others and avoid responsibility for much of their own incompetance and lack of skills.

If not a counterbalance, "Taking Responsibility" at least provides the perspective that, despite all of the dirt on Wall Street (and its affiliates), plenty of blame still lands right at the feet of the people who risked their own money first, and asked questions later . . .

I appreciate your feedback and invite you to send it to Barry Ritholtz ritholtz@aol.com.

If you would like a free subscription to my bi-weekly market comments, please send an email to email to Ritholtz@aol.com, including the word "SUBSCRIBE" in the subject matter line. Previous market comments are archived here.

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Copyright © 2001 Barry L. Ritholtz, All Rights Reserved worldwide. May not be copied, stored or redistributed without prior, written permission. Home

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