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Equity Research and the Investment Banking Division are completely different groups with procedures in place to make sure they never interact with each other.

quantified 4y ago
Right.
formercoder 4y ago
Not never. They speak regularly, with an attorney on the line, following approved topics and protocols.
- version_five 4y ago
  They speak with an attorney on the line so the conversation is privileged and cant be subpoenaed.
  - jcranmer 4y ago
    ... that doesn't give the conversation attorney-client privilege, and I think it just tends to make the judge angry when you try to claim in court that it does--it's not an effective technique in practice.
  - formercoder 4y ago
    It's a phone conversation on an unrecorded line so the presence of the attorney isn't really relevant in that sense.
- JumpCrisscross 4y ago
  To synchronise schedules and blacklists. Not to discuss valuations.
fakethenews2022 4y ago
Nope. Look at the dot-com bubble and bust when in a single firm equity research pumped and investment banking got people to buy. I asked a banker this exact question back then. All I got was flowery language of great walls and reputational damage. We all know what happened. The bubble popped. The two sides don't need to talk. The equity research is public. Incentives are such that both sides want to pump.
- Kranar 4y ago
  The dot-com bubble predates FINRA Rule 2241 which was adopted in 2015. [1] https://www.finra.org/rules-guidance/rulebooks/finra-rules/2241 https://www.finra.org/rules-guidance/rulebooks/finra-rules/2...
Dylan16807 4y ago
It's still very awkward for them to have such different valuations.
- Kranar 4y ago
  It's awkward only in the sense that the valuations are absolutely worthless. You can back test the 1 year target estimates of almost any company to see for yourself that they are junk, in fact this topic has been studied almost to death if you do a search on Google Scholar.
  - kyleee 4y ago
    savage, and interestingly enough all these financial analysts still have good paying jobs
    - BenoitP 4y ago
      IMHO it falls into the same category as content farms trying to drive traffic into buying a product.

quantified 4y ago

Right.

formercoder 4y ago

Not never. They speak regularly, with an attorney on the line, following approved topics and protocols.

version_five 4y ago
They speak with an attorney on the line so the conversation is privileged and cant be subpoenaed.
- jcranmer 4y ago
  ... that doesn't give the conversation attorney-client privilege, and I think it just tends to make the judge angry when you try to claim in court that it does--it's not an effective technique in practice.
- formercoder 4y ago
  It's a phone conversation on an unrecorded line so the presence of the attorney isn't really relevant in that sense.
JumpCrisscross 4y ago
To synchronise schedules and blacklists. Not to discuss valuations.

fakethenews2022 4y ago

Nope. Look at the dot-com bubble and bust when in a single firm equity research pumped and investment banking got people to buy. I asked a banker this exact question back then. All I got was flowery language of great walls and reputational damage. We all know what happened. The bubble popped. The two sides don't need to talk. The equity research is public. Incentives are such that both sides want to pump.

Kranar 4y ago
The dot-com bubble predates FINRA Rule 2241 which was adopted in 2015. [1] https://www.finra.org/rules-guidance/rulebooks/finra-rules/2241 https://www.finra.org/rules-guidance/rulebooks/finra-rules/2...

Dylan16807 4y ago

It's still very awkward for them to have such different valuations.

Kranar 4y ago
It's awkward only in the sense that the valuations are absolutely worthless. You can back test the 1 year target estimates of almost any company to see for yourself that they are junk, in fact this topic has been studied almost to death if you do a search on Google Scholar.
- kyleee 4y ago
  savage, and interestingly enough all these financial analysts still have good paying jobs
  - BenoitP 4y ago
    IMHO it falls into the same category as content farms trying to drive traffic into buying a product.