Mr. Levitt succeeded in putting a variety of measures on behalf of investors into effect, securities experts say, but he has also concluded in a new memoir, "Take on the Street" (Pantheon, 2002), that he was forced to reach a variety of compromises -- such as on rules governing stock analyst conflicts of interest and auditor conflicts -- that he now regrets.
Judith H. Dobrzynski Correction: February 12 , 2002 Tuesday An article in Money & Business on Sunday about efforts to reregulate businesses in the aftermath of the collapse of Enron, including proposals to reduce stock analysts' conflicts of interest, misstated Lehman Brothers' investment opinion on Enron stock.
Salomon Smith Barney, one of the Wall Street firms under scrutiny by investigators for the New York State attorney general, has urged regulators to curb stock analysts' conflicts of interest, making them more independent from investment bankers.
Archives|FOREIGN STOCK MARKETS.; Conflicting Movement in French State Bonds -- London Irregular.
FOREIGN STOCK MARKETS.; Conflicting Movement in French State Bonds -- London Irregular.
"The most senior officers of Salomon privately acknowledged that its investment bankers successfully pressured its analysts to avoid negative ratings, and that providing accurate stock ratings conflicted with Salomon's paramount goal of securing investment banking business, and not giving true and accurate information to investors".
The brief also noted that the "most senior officers of Salomon" acknowledged privately that its investment bankers pressured its analysts to avoid negative ratings and that "providing accurate stock ratings conflicted with Salomon's paramount goals of securing investment banking business".
"The tech stock bubble and conflicts at brokerage firms will be central to their decisions," Mr. Lowenfels said.
"To the extent that they have a portfolio or blind trust that holds Goldman Sachs stock, they have conflicts," said James K. Galbraith, a professor of government and business relations at the University of Texas.
The full article from which this post is excerpted also examines a host of other issues including disclosure controls and procedures, stock exchange requirements, conflicts of interest, board independence, and more, highlighting for each issue where things went wrong and identifying resources that perhaps could have helped avoid this type of mess.
