From: Russell, Racquel Sent: Tuesday, May 07, 2002 6:34 PM To: Rule-Comments Subject: FW: Analysts -----Original Message----- From: David Hauck [mailto:dahauck@carolina.rr.com] Sent: Sunday, May 05, 2002 7:38 PM To: marketreg@sec.gov Subject: Analysts Want to restore investor confidence? Perhaps this past decade has been instrumental in educating the individual investor that he has little, if any control, over obtaining the facts and research of a corporation regardless of how astute his research prior to investment might have been. This is especially true if he has relied on any of the so-called research corporations furnishing ‘research’. Few are they, who would believe the analyst’s ratings mean anything for the individual investor. Most have learned that the analyst is no more than a very high paid employee of the firm he works for. Painfully he has learned that their first duty is to honor the firm’s investment banking business, it is institutional investors and that is it. It does not take long to understand the ‘research’ obtained by most individual investors is as useful as last years news. Out and out lies are recognized as “slanted” news. That analysts commonly recommend ‘buy’ or better when they plan and do ‘sell’, not to mention shorts, these very same stocks. There is so much conflict of interest going on in the world of analysts that NASD, itself, could not qualify to be umpires at a local ballgame. I read this article in the paper that said, “The National Association of Securities Dealers and the NYSE want to keep analysts more independent of their firms investment banking business…” What a joke, analysts are as independent of their firms as the government is independent of taxes. When the last time you read where an analyst said, “the CEO of XWZZ makes far too much money.” You never will. A report by acting Chair of SEC, Laura Unger, suggesting analysts should receive no compensation from IB deals, or analysts can not short or sell stock on which they issue ‘buy’ rating or buy when rating a ‘sell’. (DUH). Sure, a help, but isn’t that like ‘close off the front compartment only on the Titanic’ What is needed is a totally independent analysts system run by the SEC. (Do away with the NASD). A system that can go thru the numbers, CLOSELY, AND THEIR SOMETIME QUESTIONABLE FORMS OF ACCOUNTING, a totally independent system that would say if the CEO was making more than most in his market, or the tock should be rated a sell or whatever. This system should incorporate a rating of analysts to see who and what they say and do. What kind of system could do this? The same kind of system that handles over one billion sales in eight hours…. the whole country needs a computer system to do the above. Companies and analysts must submit reports to SEC make sure they submit just the one report. Now if you can find a way to cut back on the company giving unpublished information to a analyst, or small tidbits Or who gets a major announcements by phone and who does not OR… At least most would feel like this is a real rating! David A. Hauck Charlotte, NC