Independent Research Not Really Working Out

When Wall Street’s top investment banks formalized their $1.4 billion global research settlement with the SEC in April 2003, in addition to making numerous reforms, they agreed to pay $450 million over five years to provide clients with independent equity research alongside their own. The idea was to create a new model for the industry that would avoid the conflicts of the old investment banking-driven one, while still producing a high-quality product. But in practice, it doesn’t seem to be working for much of anyone.