Eighteen brokerages agree with NY AG to stop answering analyst surveys
Eighteen brokerages, including Goldman Sachs, JPMorgan Chase, and Citigroup, agreed to end their participation in analyst survey programs as a result of the New York Attorney General's investigation into the early release of Wall Street analyst sentiment.
The agreement with the New York Attorney General Eric Schneiderman's office comes less than two months after BlackRock, the world's largest asset manager, agreed to end its analyst survey program worldwide.
At that time, the attorney general said that his investigation would continue into the firms that answered surveys.
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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."
Schneiderman's 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 Bank of America/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.
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All the firms will continue to cooperate with the investigation, which is ongoing and have agreed to suspend participation in any survey that relates to companies listed on U.S. exchanges.
None of the firms were available for immediately available for comment outside regular business hours.
Last July, Thomson Reuters said it would suspend its early release of the widely watched Thomson Reuters/University of Michigan consumer sentiment data to a small group of clients in response to a probe by Schneiderman.