Events in the Probes of Stock Analysts
Here is a chronology of events in the government probes into tainted Wall Street stock research:
2001
* June 14: Congress holds its first hearing on analyst conflicts of interest.
* July 31: A Securities and Exchange Commission survey shows that more than one-quarter of analysts had purchased stocks before recommending them to investors.
2002
* April 8: New York Atty. Gen. Eliot Spitzer says his investigation of Merrill Lynch & Co. Internet-stock analysts showed they privately disparaged stocks that they were publicly recommending to investors. Merrill denies the allegations.
* April 23: State securities regulators say they formed a multi-state task force to investigate Wall Street firms for possible securities law violations in issuing misleading stock research.
* May 21: Merrill Lynch reaches a settlement with Spitzer, agreeing to pay a $100-million fine and change the way it pays its stock analysts.
* May 31: The SEC confirms that it is investigating 10 possible conflict-of-interest cases regarding analysts and investment bankers.
* Aug. 15: Jack Grubman of Citigroup Inc.’s Salomon Smith Barney unit, one of Wall Street’s highest paid and most influential analysts, resigns under fire. He receives a $32.2-million severance package.
* Sept. 19: Massachusetts securities regulators recommend that Spitzer bring criminal charges against Credit Suisse First Boston, a unit of Credit Suisse Group, over its stock research.
* Sept. 30: Spitzer sues five former and current telecommunications executives, claiming that they received shares of hot stock offerings from Salomon in exchange for investment banking business.
* Oct. 3: Spitzer and the SEC team up to investigate stock research and IPO practices, paving the way for an industrywide settlement to curb Wall Street abuses.
* Dec. 20: Spitzer, the SEC, NASD (formerly known as the National Assn. of Securities Dealers), other states and 10 brokerage firms announce a $1.4-billion settlement and a number of changes to how Wall Street does business.
