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 settlement back in 2003, imposed by the then New York State Attorney General, provided for so-called independent securities evaluation. It was supposed to be a buffer from what was being offered by those 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 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 @BusinesNewshole at Twitter.)
