Wall Street firm Merrill Lynch which has been accused of issuing biased research, said today it is working with the New York State Attorney General to reach agreement on how it should disclose investment banking relationships on its analyst reports.
A top executive at Merrill, which reported a 26-per cent decline in quarterly earnings today, said the discussions will result in changes to the way its research reports will look.
New York Attorney General Eliot Spitzer has accused Merrill of tailoring its research to attract investment banking deals.
The matter is of importance to the Securities and Exchange Commission and the National Association of Securities Dealers, Merrill chief financial officer Mr Tom Patrick told investors on a morning conference call.
Any changes Merrill must make to its research practices should be applied to its competitors, Mr Patrick said.
Mr Spitzer has not ruled out bringing Merrill up on criminal charges, and has said he wants the firm to spin off its research unit as a separate entity.
Mr Spitzer won a court order that would have forced Merrill to disclose its banking relationships on all research reports, but the firm was granted a stay that was eventually extended until Friday.
Mr Spitzer has subpoenaed other Wall Street firms but has not levied any charges against them.