The need for independent, rather than broker or investment banker securities research, arose because of both real and imagined problems about the work of in-house securities analysts.
A 2003 settlement imposed by then New York State Attorney General, Eliot Spitzer, provided for so-called independent securities evaluation. It was supposed to be a buffer to what was being offered by those analysts also underwriting securities. It thus forced them to spend $460 million to finance “independent” research, on behalf of non-institutional clients.
Such securities research was little used. Yes, some independence was achieved, but few investors have since used that source of information.
However, it was a political success at the time the settlement was made. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)
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