Forget the Ethics, This is Just Plain Embarrassing
It ain’t looking good for Guy Chiarello, the Morgan Stanley CTO who is sinking deeper into a morass of ethical problems with each passing day. The Post is now reporting a series of emails in which the managing director effectively tried to bribe one of the owners of the Yankees to let him be a bat boy for a day in return for, wink-wink, a lot of “interest” (i.e. ticket sales) from Morgan. The owner approached by Chiarello confirmed to The Post that the e-mails were authentic - and said that he tried “very hard to find a polite way to turn a crazy request from a guy I’ve never heard of down.” Yeah, what’s up with a grown man begging to be a bat boy?
Banker’s Batty Request to Yanks [NY Post]
Numberous Ethics Violations by MS CTO Alleged
The news at Morgan Stanley just keeps getting worse. After mass defections over recent months now the firm’s chief technology officer has gotten caught with his hand in the cookie jar. Guy Chiarello, score primo tix to sporting events, got vendors to install fancy electronics in his home, and used Morgan’s IT budget to help the firm land investment banking deals, according to The Post. The problem? Looks like some of these activities may have been in violation of the firm’s ethics codes. A Morgan spokesman said the firm has found “no evidence that Mr. Chiarello’s conduct warranted disciplinary action.” Once again, the nail in the coffin in this case is the trail of email messages. When are Wall Streeters gonna learn? Step outside and use your friggin’ cellphone, people!
Breach of Ethics [NY Post]
Merrill Sued for Canning Squawk Box Whistle Blower
Merrill Lynch had to answer to the Occupational Safety and Health Administration this week in connection with a suit by former broker James Altschul. The 65-year-old Garden City-based employee claims he was fired for cooperating with the investigation into last year’s squawk box scheme. To refresh, the SEC charged that day trader John J. Amore paid brokers at Citigroup, Lehman Brothers and Merrill Lynch to provide live audio access to those firms’ “squawk boxes” in order to front run the inevitable flood of institutional orders that would follow. Meanwhile, Merrill’s sticking to its story that Altschul’s firing had nothing to do with his cooperation and everything to do with “inappropriate office conduct.” Right.
Ex-Merrill Broker Challenges Firing [WSJ]
Independence Pays: Matrix Rocks Analyst Rankings
Maybe there was something to the idea of creating independent research firms. Free of investment banking conflicts, the thinking went, these firms would be able to pick stocks based on nothing but raw analysis. One of these firms created in the wake of Eliot Spitzer’s landmark settlement with Wall Street firms, Matrix USA, built a business around a concept called Economic Value Added, which is nothing but a company’s return on capital less the cost of that capital. Seems to have worked, too: In the latest rankings by Bloomberg, Matrix is the top analyst in 580 of the 1,027 stocks it follows and holds one of the top three spots in 870 stocks.
Top-Ranked Analyst Unknown But Unbeaten [Fortune]
