THE TALKING CURE.(Wall Street's new candor regarding conflicts of interest in securities and accounting industries)

Publication: The New Yorker

Publication Date: 09-DEC-02

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COPYRIGHT 2002 All rights reserved. Reproduced by permission of The Condé Nast Publications Inc.

When you think of Wall Street, candor is probably not the first word that leaps to mind, but in the past few months the Street has been gripped by it. Merrill Lynch now warns, on the first page of each of its research reports, that it may be seeking "investment banking or other business relationships from the companies covered in this report." (That is to say, the analysis may be tainted.) The New York Stock Exchange, meanwhile, has proposed a rule that would bar a stock-market analyst from talking to newspapers that fail to disclose the analyst's conflicts of interest. Even the C.E.O. of Goldman Sachs, one of Wall Street's most discreet firms, has chimed in with a public nostra culpa on behalf of the industry, and has exhorted his peers to restore "trust in our system."

This outbreak of...

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