|
|
|
|
||||
|
||||
Conflicts of Interest and Stock Recommendations: The Effects of the Global Settlement and Related RegulationsOhad KadanWashington University in Saint Louis - John M. Olin Business School Leonardo MadureiraCase Western Reserve University - Weatherhead School of Management Rong WangSingapore Management University Tzachi ZachOhio State University (OSU) - Fisher College of Business October 2009 The Review of Financial Studies, Vol. 22, Issue 10, pp. 4189-4217, 2009 Abstract: We study the effect of the Global Analyst Research Settlement and related regulations on sell-side research. These regulations attempted to mitigate the interdependence between research and investment banking. We document that following the regulations many brokerage houses have migrated from the traditional five-tier rating system to a three-tier system. Optimistic recommendations have become less frequent and more informative, whereas neutral and pessimistic recommendations have become more frequent and less informative. Importantly, the overall informativeness of recommendations has declined. The likelihood of issuing optimistic recommendations no longer depends on affiliation with the covered firm, although affiliated analysts are still reluctant to issue pessimistic recommendations.
Keywords: G14, G24, G28 Accepted Paper SeriesDate posted: September 28, 2009Suggested CitationContact Information
|
|
||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo3 in 0.359 seconds
