Conflict of Interest
One of the big issues around the research analyst role has been the conflict of interest issue. This was a high-profile issue in the late 1990s when there were some questions raised about the fact that a research analyst at a bank had been paid off the back of the fees that the bank made on an initial public offering (IPO) for a client. The research analyst was very well known and his research was well distributed. He had written a buy recommendation for the shares of the IPO. The conflict of interest issue was considered significant in this case due to the very large bonus he was paid which had been attributed to the high-profile IPO. At the time this was an open secret in the financial markets. Every bank about to issue ...
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