Wall Street brokerage Merrill Lynch has agreed to greater disclosure of potential conflicts of interest involving its stock analysts to investors under an agreement with New York's attorney general, reports said today.
But Merrill and Mr Eliot Spitzer have not yet agreed on broader changes under discussion to reform the way analysts rate stocks, or a fine to settle the case, sources said.
Mr Spitzer has said a final agreement could be used as a model for settlements with at least six more large Wall Street firms under investigation for possible conflicts of interest among its analysts.
Under the agreement, Merrill Lynch will establish a website immediately listing the firm's former and current investment banking clients so investors can determine whether Merrill Lynch has received fees from the same companies its analysts are rating.
Analysts' research reports on publicly traded companies will also note whether Merrill Lynch has done business with those firms.
Mr Spitzer's office has led a 10-month investigation into Wall Street stock research that has focused on Merrill. He has accused the broker of misleading investors by issuing flattering research reports on companies to drum up investment banking business.
Mr Spitzer last week unveiled a series of Merrill Lynch e-mail messages he said showed that the firm's analysts had grave doubts about shares of some companies they were publicly encouraging investors to buy.
Published reports have said that Merrill Lynch might be asked to pay as much as $100 million in a combined fine and payment to small investors who lost money as a result of the analysts' recommendations.
