The practice referred to as "spinning' has been a hot topic in light of the huge fall out from corporate fraud that has affected investor confidence and resulted in new laws being created. A lot of investors suffered huge financial loss because of the Wall Street analyst scandal, which is considered one of the most negative, discomforting occurrences in Wall Street history. The fraudulent practices uncovered were finally hard evidence that confirmed many suspicions of corporate fraud occurrences.
A final settlement has finally been reached after nearly four month of trying to come to agreement regarding particular language used in the settlement because firms involved are trying to avoid any amount of increased legal liability. The settlements have involved biased stock research by large investment banks. Banks have been misleading investors and new laws requiring more disclosure and transparency from corporations have been created in hopes of helping eliminate corporate fraud.
Sources familiar with the scandal have said that the SEC has given firms until Monday, April 28, 2003 to sign and deliver documents that agree to final terms. The SEC will then vote on the settlement Tuesday, April 29, 2003 and make an announcement the following day. The final settlement has been a very long awaited conclusion to the many hold-ups that have occurred, but sources warn last minute disagreements can cause further delays still.
The conclusion of the settlement will result in many lost jobs and money, but hopefully investors will have renewed confidence in the industry and will be able to trust research analysts are providing unbiased stock opinions. In addition, people that have suffered great monetary losses due to the corporate fraud may be able to recover damages in securities fraud class action lawsuits.
For more information on securities fraud contact us to confer with a securities fraud attorney.