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| 2002 News and Press Releases |
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HEADLINE ARCHIVED:
Proposed Rules For Analysts Raise The Ire Of Publications
By: Jonathan D. Glater & Landon Thomas Jr.
NYTimes.com. November 23, 2002
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EXCERPT: Rules proposed by the New York Stock Exchange that seek to disclose Wall Street analysts' possible conflicts of interest would create a quandary for newspapers and magazines, lawyers and editors said yesterday. Under the proposed rules, which require the approval of the Securities and Exchange Commission, when analysts talk to journalists about a stock, they would have to disclose whether they own that stock or whether their firms do business for that company. But the rules also say that if a publication did not print this information when citing an analyst in an article, then the analyst would be expected not to speak to that publication again. An analyst who did not comply could be subject to penalties that could include fines or even suspension. Though broadcasters, which are subject to some government regulation, have complied with similar rules for several months, newspapers and magazines are not regulated and have been fiercely critical of any suggestion that a rule backed by a government agency could dictate what they must print, even indirectly, or block their access to sources of information. Many of them, including The New York Times, already have guidelines for informing readers about conflicts of interest among analysts; they object not to the disclosure but to the government's intrusion into their decision making. Some media lawyers said the rules would violate the First Amendment's ban on government interference with the press. Regardless of the final rules, Wall Street firms, concerned about their vulnerability to litigation, are already closely monitoring what their analysts say, imposing new approval procedures for talking to reporters and in some cases limiting access to the news media outright. Some analysts say they have simply stopped talking to journalists because of the added trouble and risk.
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