[corp-focus] Brokerman

[Robert Weissman]

Brokerman
By Russell Mokhiber and Robert Weissman

So, you want to buy some stock in an American corporation.

And you go to your broker.

Brokerman, please help me.

I want to buy some stock in an American corporation.

But here's the thing, Brokerman, sir.

Is Wall Street a safe neighborhood, sir?

Can't safely go into Wall Street, with executives being led away in
handcuffs, can I, Brokerman sir?

Calm down, calm down -- Brokerman says.

It's all media hype.

I'm here on Wall Street, and I haven't been mugged, have I?

But Mr. Brokerman, sir, I'm watching television and see these corporate
executives being handcuffed by big burly guys in blue jackets and big
yellow letters on the back that say F-B-I.

Turn off your television. It's all tabloid stuff, Brokerman says.

Lookee here, Brokerman says -- I've got these ratings.

I take all the financial data from all the publicly held companies and
rate each one, A to F -- just like grade school.

Now -- Brokerman says -- here are a group of stocks that you can buy
safely -- because the computer has rated them A.

Don't worry. Trust me.

Everything is going to be alright.

Trust me.

Yeah right.

Andersen -- guilty, obstruction of justice.

ImClone Systems CEO -- under indictment, insider trading.

Martha Stewart -- under investigation, insider trading.

Enron -- criminal investigation.

Or what about Adelphia, CMS Energy, Computer Associates, Dynergy, Global
Crossing, Halliburton, Kmart, Lucent Technologies, MicroStrategy,
Network Associates, PNC Financial Services, Qwest Communications,
Reliant Resources, Tyco International, WorldCom, and Xerox?

All of them are now facing serious questions about their business
practices.

Three Rite Aid executives -- indicted for cooking the company's books by
overstating revenues by $1 billion.

Trust me.

Trust me.

Remember Merrill Lynch?

Remember the Merrill Lynch analysts who were telling their customers --
trust me, buy this stock, this stock is highly rated?

And then they would turn around and e-mail their buddies -- hey, this
stock is crap, why are we recommending this crap to our customers?

And then New York Attorney General Eliot Spitzer gets ahold of the
e-mails, brings some kind of enforcement action, and goes before the
television, and says the case is settled, Merrill will pay $100 million.

But Spitzer doesn't get Merrill to admit wrongdoing. And he signs some
kind of agreement that is totally unenforceable.

He later admits that had he forced Merrill to admit wrongdoing, the firm
would have gone kaput. Just like Andersen.

And Merrill Lynch isn't the least of them. Most of the big investment
companies are now under investigation by the states for misleading
investors just like Merrill did.

Weiss Ratings Inc. is an independent ratings firm
(www.weissratings.com).

Earlier this month, Weiss Ratings released a study that found that among
the 50 brokerage firms covering companies that have gone bankrupt this
year, 47 firms continued to recommend that investors buy or hold shares
in the failing companies even as they were filing for Chapter 11 in the
first four months of 2002.

Lehman Brothers maintained six buy ratings on failing companies, while
Salomon Smith Barney maintained eight hold ratings up through the date
the companies filed for bankruptcy.

Also sticking with buy ratings until the very end were Bank of America
Securities, Bear Stearns, CIBC World Markets, Dresdner Kleinwort
Wasserstein, Goldman Sachs, and Prudential Securities.

"This analysis shows that Wall Street's record is far worse than
previously believed," says Martin D. Weiss, chair of Weiss Ratings "Even
when there was abundant evidence that companies were on the verge of
bankruptcy, over 90 percent of the latest ratings issued by brokerage
firms continued to tell investors to hold their shares or buy more."

So, what happens when people think that the Street is being overrun by
criminals?

They don't go there.

And that's what investors have started doing. Pulling out.

As the Dow heads below 9,000 (James "Dow 36,000" Glassman, where art
thou?), can anyone doubt why?


Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor, http://www.multinationalmonitor.org. They are
co-authors of Corporate Predators: The Hunt for MegaProfits and the
Attack on Democracy (Monroe, Maine: Common Courage Press, 1999;
http://www.corporatepredators.org).

(c) Russell Mokhiber and Robert Weissman

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