This content is from: Innovation

Sirri: Brokers, Not Analysts, At Fault For Research Scandal

Brokers and not analysts are to blame for the research scandal that shook the financial service industry three years ago, according to a statement made in 2004 by Erik Sirri, newly appointed regulatory head at the Securities and Exchange Commission.

Brokers and not analysts are to blame for the research scandal that shook the financial service industry three years ago, according to a statement made in 2004 by Erik Sirri, newly appointed regulatory head at the Securities and Exchange Commission. In a Federal Reserve Bank of Atlanta publication, Sirri wrote that it “makes more sense to look [to place blame] on the brokers who put the retail investors in the stocks than to the analysts themselves…. These brokers should have insured that retail investors had prudent and diversified portfolios.” He said analysts may have created the hype, but it was “the brokers’ job to temper this enthusiasm with prudent restraint.”

Related Content