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" (Whalen, 2003).
More conservative critics of analyst conflicts rules believe that they are a step in the right direction, but view them as a work in progress. For example, the Sarbanes-Oxley bill, which mandated many improvements in corporate managers' financial practices, did nothing to reduce the unethical practice by many managers of communicating only with those analysts who cooperate with management's forecasts of the future (Boni and Womack). This and other rules need strengthening.
Wall Street Journal reported in April 2003 that the brokerage firms of the top investment banks are still more likely to give optimistic research recommendations to their own banking clients, calling to question if new disclosure rules reapply protect investor clients (Boni and Womack). With all the hoopla to protect investors, it's important to remember that disclosure of unethical activity is not the same as not engaging in unethical behavior. How many investors actually read and understand the new disclosures is unclear. Ultimately, too much burden is on the individual investor to discover conflicts of interest. Therefore, ongoing enhancements to conflicts of interest rules need to be more to stop unethical conduct rather than to simply require public admission.
Bibliography
60 Minutes - the sheriff of Wall Street (2002, October 6). Retrieved January 11, 2005 from James Hoyer Web site: http://www.jameshoyer.com/news_cbs_merrill_lynch.html
Boni, L. And Womack, K.L., Wall Street research: will new rules change its usefulness? Retrieved January 11, 2005 from The University of New Mexico...
(2003, March 6). Outline of new research analyst conflicts of interest rules. Retrieved January 11, 2005 from Security Industries Association Web site: http://216.239.63.104/search?q=cache:ETmwyiBBHrMJ:www.sia.com/ResearchManagement/pdf/ResearchOutline.pdf+%22NASD+Rule+2711%22& hl=en
Rayburn, K. (2004, Winter). Insecure securities. Impact. Retrieved January 11, 2005 from University of Louisville Web site: http://php.louisville.edu/advancement/pub/impact/winter2004/insecure.php
Report on analyst conflicts of interest (2003, September). Retrieved January 11, 2005 from International Organization Of Securities Commissions Web site: http://www.iosco.org/pubdocs/pdf/IOSCOPD152.pdf
Richards, L. (2002, May 8). Analysts conflicts of interest: taking steps to remove bias. Retrieved January 11, 2005 from U.S. Securities and Exchange Commission Web site: http://www.sec.gov/news/speech/spch559.htm
Securities and Exchange Commission Litigation Release No. 18116 (2003, April 28). Retrieved January 11, 2005 from U.S. Securities and Exchange Commission Web site: http://www.sec.gov/litigation/litreleases/lr18116.htm
Whalen, C. (2003, February 24). Just say no. Barron's Online. Retrieved January 11, 2005 from Web site: http://216.239.57.104/search?q=cache:wK5ohqYxTEwJ:www.rcwhalen.com/pdf/Barrons_Just%2520Say%2520No_022403.pdf+%22research+analysts%22+and+unethical& hl=en
Bibliography
60 Minutes - the sheriff of Wall Street (2002, October 6). Retrieved January 11, 2005 from James Hoyer Web site: http://www.jameshoyer.com/news_cbs_merrill_lynch.html
Boni, L. And Womack, K.L., Wall Street research: will new rules change its usefulness? Retrieved January 11, 2005 from The University of New Mexico Web site: http://66.102.7.104/search?q=cache:Vops0e1attQJ:www.unm.edu/~boni/FAJ_MayJune2003.doc+%22NASD+and+NYSE+rules%22+and+%22conflict+of+interest%22+and+%22not+enough%22& hl=en
Fleischman, D. (2003, March 6). Outline of new research analyst conflicts of interest rules. Retrieved January 11, 2005 from Security Industries Association Web site: http://216.239.63.104/search?q=cache:ETmwyiBBHrMJ:www.sia.com/ResearchManagement/pdf/ResearchOutline.pdf+%22NASD+Rule+2711%22& hl=en
Rayburn, K. (2004, Winter). Insecure securities. Impact. Retrieved January 11, 2005 from University of Louisville Web site: http://php.louisville.edu/advancement/pub/impact/winter2004/insecure.php
Report on analyst conflicts of interest (2003, September). Retrieved January 11, 2005 from International Organization Of Securities Commissions Web site: http://www.iosco.org/pubdocs/pdf/IOSCOPD152.pdf
Richards, L. (2002, May 8). Analysts conflicts of interest: taking steps to remove bias. Retrieved January 11, 2005 from U.S. Securities and Exchange Commission Web site: http://www.sec.gov/news/speech/spch559.htm
Securities and Exchange Commission Litigation Release No. 18116 (2003, April 28). Retrieved January 11, 2005 from U.S. Securities and Exchange Commission Web site: http://www.sec.gov/litigation/litreleases/lr18116.htm
Whalen, C. (2003, February 24). Just say no. Barron's Online. Retrieved January 11, 2005 from Web site: http://216.239.57.104/search?q=cache:wK5ohqYxTEwJ:www.rcwhalen.com/pdf/Barrons_Just%2520Say%2520No_022403.pdf+%22research+analysts%22+and+unethical& hl=en
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