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Analysts' research 'tainted'

12 April 2012

BRITISH regulators may face pressure to examine the independence of City analysts after disclosures in the US suggesting many there have been collecting bonuses for setting up investment banking deals. If evidence emerged of similar behaviour here it would put into question the validity of analysts' share recommendations.

New York Attorney General Eliot Spitzer said: 'We are just beginning to see massive evidence that analysts research for years has been tainted by employment contracts that directly compensate them.'

Inquiries allege that Credit Suisse First Boston offered analysts up to $250,000 from investment banking deals they helped bring in. The company has not commented. US regulators have been pressing for firms to completely sever their investment banking and research arms.

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