Despite Law, Wall Street Analysts Nudge, CEOs Wink
Professor Robert M. Daines is quoted in the following story published by Reuters about power dynamics in Wall Street:
Access is still the name of the game if you are a Wall Street analyst.
Critics of the relationship between analysts and the companies they cover are drawing that conclusion from recent cases when companies blocked access to analysts who wrote negative reports about the companies.
The cases illustrate a big problem for retail investors: selective disclosure to deep-pocketed investors and friendly analysts, technically banned a decade ago, is alive and well.
"On Wall Street, as anywhere else, knowledge is power, so it's obvious there's going to be a conflict," said Robert Daines, a Stanford University professor of law and business.
"It's kind of like the Starbucks coffee mugs: Everyone knows 'large' means 'medium,' and pretty soon you adjust."