Is Wall Street backsliding on research?

August 11, 2010 | By Jim Kim

It seems like the global settlement by top Wall Street firms of charges that its stock research was tainted happened a long time ago. Indeed, the settlement's provision for banks to distribute more independent research has expired. We may be seeing some slippage in some areas.

FINRA (FINRA news) has slapped Morgan Stanley (NYSE: MS) on the wrist--to the tune of $800,000--for some disclosure problems. Notably, it failed to disclose accurate information about relationships analysts had with companies they were covering, its role as an underwriter for a covered company, and its role as an investment banker for a covered company and its role as a market maker.

This is a bit troubling, and suggests that the compliance focus is elsewhere in the company right now. You certainly get the feeling that stock research is not an area of growth and investment. The business model remains iffy, and the status low. Stay tuned. We may see similar measures against others.

For more:
- here's the release