6 January 2003 Former high-flying stock market analyst Henry Blodget is facing formal action from the US National Association of Securities Dealers (NASD).
The ex-Merrill Lynch analyst, who became famous for his forecast for Internet company stocks during the stock market bubble, has received a “Wells Notice”, which gives the analyst the chance to refute any claims made against him before the regulatory agency takes any action.
Merrill Lynch has already settled for $100 million (€95.4m) a New York law suit that alleged that the bank’s Internet research group had hyped stocks in a bid to win new business. The settlement prohibited the suit from being extended to Blodget, whose emails privately denigrated companies he and the bank were publicly promoting, but did not preclude others, including NASD, from continuing investigations.
Among the penalties Blodget faces are fines and a suspension. Another analyst whom NASD investigated, Jack Grubman of Salomon Smith Barney, eventually had to pay $15 million (€14.3m) and was banned from the securities business.
