Lock Up The Analysts

from the throw-away-the-key dept

Salon is running what looks like a replica of a Fortune article we posted a few months back saying that “white collar” criminals” almost never go to jail – or if they do, they spend significantly less time there, despite the much larger effect of their crime. This article, though, focuses much more on the analysts who recommended all those stocks that went nowhere. There are some people who would like to see those analysts go to jail. While I’m no fan of analysts, I’m not sure jail is the right thing for them. The incentives for them to do what they did were clearly in place, and it’s unclear if they did anything that was blatantly illegal. There were plenty of willing (greedy) investors ready to buy into their scams, and they also deserve some of the blame. The only way to prevent these sorts of things are to change the incentive structure to keep the analysts completely separate from the bankers.

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