CROOK NEWS: Former Merrill analyst fined over Tyco,HON coverage
The Associated Press - May 25, 2004, 2:44 PM EDT
A former Merrill Lynch analyst who gave a $4,500 case of wine to the head of Tyco International has been fined $225,000 and suspended from the industry for a year for providing "misleading and skewed research," regulators said Tuesday. The National Association of Securities Dealers said Phua Young's coverage of Tyco and a second company, Honeywell International Inc., violated industry rules and hurt individual investors. "The conduct of this analyst amounted to a betrayal of the objectivity and honesty in research that investors are entitled to," said Barry R. Goldsmith, NASD executive vice president for enforcement. "We will continue to hold analysts to high professional standards and appropriately sanction them for misleading and skewed research." Young covered Tyco and Honeywell from 1999 through April 2002, when Merrill fired him. The NASD filed a civil complaint against him last year. (Worthless POS IMTO)
Young consented to the fine without admitting or denying guilt, NASD said. Edward Little, a lawyer for Young, declined to discuss the settlement other than to say, "We wanted a speedy resolution of this case, so that Phua could return to work as soon as possible." Regulators cited a number of infractions by Young, in which they said he issued positive research reports, despite doubts that he expressed to colleagues in e-mail. They also said he kept too-close ties to a company he was supposed to objectively monitor. During June and July 2000, the regulators said, Young issued five favorable research reports about Honeywell but referred to the company as a "totally unmitigated disaster" and used an obscenity to describe its rationale for an earnings shortfall.
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