IN WALL STREET WE TRUST.(customer loyalty to securities firms)

Publication: The New Yorker

Publication Date: 26-MAY-03

Bookmark this article Print this article Link to this article Email this article Digg It! Add to del.icio.us RSS

COPYRIGHT 2003 All rights reserved. Reproduced by permission of The Condé Nast Publications Inc.

the financial page

Last year, Merrill Lynch was accused of defrauding its clients by giving them corrupt advice about which stocks to buy. Internal e-mails demonstrated that its research analysts had publicly recommended stocks that they'd privately derided. The company wound up having to make a payment of a hundred million dollars, as part of a settlement with the New York Attorney General's office. And how did Merrill's retail clients react to all this? They gave the company eighteen billion more dollars to manage. It was a tough year for Citigroup, too, what with the revelations about chicanery at its Salomon Smith Barney division, whose customers lost vast sums of money on tainted stock tips from the likes of Jack Grubman. So what did the customers do? They gave Citigroup another thirty-five billion dollars to manage.

If Circuit...

Read the full article for free courtesy of your local library.