The $100m Merrill Settlement: Aftermath

NEWS Thirty-six hours after investment bank Merrill Lynch agreed to a $100m settlement in the case of alleged dot-com wrong doing, the UK press has turned its attention to investors this side of the Atlantic. A number of people are calling for an Eliot Spitzer-style inquiry over here. The Times spoke to one of them, lawyer Stephen Alexander who is acting on behalf of aggrieved UK investors. "It is very difficult for small investors to take on the might of the investment banks unless they have help form the regulating authorities," he told the paper. Alexander will be encouraged by the words of Sir Howard Davies, head of the Financial Services Authority. Quoted in the Daily Telegraph Sir Howard admits the UK investment community is unlikely to be found completely innocent. "It would be surprising if none of the undesirable feature of the parts of the US market ... was to be found anywhere in London." He added, however, that at least the UK didn't suffer from the "cult of the guru analyst". Turning its attention back to the US, The Guardian says the dual affect of the Merrill Lynch affair and the ongoing Enron saga will have a lingering effect in the minds of the American investor. "Some 70 per cent of Americans now have direct investments in the stock market, but faith is severely dented and it will be difficult to regain." Finally, Merrill Lynch has already begun a charm offensive with a full page advert in today's Wall Street Journal. The ad that leads with the banner "A new standard for investment research" makes no direct reference to the controversy. It does, however, promise that "research analysts will be compensated for only those activities and services intended to benefit Merrill Lynch's investor clients". For related news, see:
Merrill Lynch says sorry and pays $100m in dot-com settlemen