Eighteen brokerages agree with NY AG to stop answering analyst surveys

Written by Reuters | Updated: Feb 27 2014, 08:18am hrs
Eighteen brokerages, including Goldman Sachs, JPMorgan Chase and Citigroup, agreed to end their participation in analyst survey programmes as a result of the New York attorney generals investigation into the early release of Wall Street analyst sentiment.

The agreement with the New York attorney general Eric Schneidermans office comes less than two months after BlackRock, the worlds largest asset manager, agreed to end its analyst survey programme worldwide.

At that time, the attorney general said that his investigation would continue into the firms that answered surveys. Schneiderman had expressed concerns over brokerage firm analysts who provide answers to surveys that give traders a sneak peek into forthcoming analyst reports, a practice he referred to as Insider Trading 2.0.

Schneidermans office said it entered agreements with the firms to stop the practice of answering analyst surveys administered by certain elite, technologically sophisticated clients at the expense of others.

Our markets will only be fair and healthy if everyone plays by the same rules, which is why we will continue to take action against those who provide unfair advantages to elite traders at the expense of the rest of us, Schneiderman said in a statement. The agreements with the firms are not indicative of wrongdoing or a final resolution of the investigation, according to an agreement seen by Reuters.

Other firms included in the deal are Merrill Lynch, UBS, Barclays, Credit Suisse, Morgan Stanley, Deutsche Bank Securities, Jefferies, Sanford C Bernstein, Macquarie Group, Vertical Research Partners, FBR Capital Markets, Wolfe Research, Stifel Nicolaus and its units Keefe, Bruyette & Woods and Thomas Weisel Partners.