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Increasing Investor Awareness
March 15, 2002
By Mike Schiller

It is universally agreed upon that Wall Street Analysts play a vital role in helping keep the public informed of business activities that could impact share value. I have written the foundation for a piece of legislation that should receive broad bipartisan support in both houses, as well as the support of the vast majority of publicly traded companies, and all shareholders, and analysts as well.

In an election year, this legislation would greatly benefit anyone who supported it, since almost all Americans would stand to gain from it in one way or another.

THE EQUAL OPPORTUNITY FOR COVERAGE ACT

This legislation should establish Research Analysts as mandatory components of every firm which sells stocks. The legislation should require that all firms hire enough analysts to provide full coverage of every publicly traded company.

It would reduce the potential for unfairly favorable coverage by ensuring that all companies are in fact covered by one analyst or another. It would also ensure that all publicly traded companies are given a chance to have their value assessed so that those who have the chance to succeed are given the opportunity to have that potential value expressed to shareholders by an expert.

It would also secure the jobs of analysts, enabling them to dispense more objective advice without fearing retaliation from their employers.

Every company should have the chance to have their worth evaluated by the firms who sell their stocks. This would also enable shareholders to be able to seek and receive information on any company whose stock is sold.

If a firm is selling a stock, they should be required to be able to tell people why they should or should not buy it. This can only be achieved by forcing these firms to hire enough analysts to cover the entire stock market, so investors can make more informed decisions.

Every firm should be required to keep their research divisions robust for the benefit of shareholders and publicly traded companies. Only then can we truly rely on the accuracy and completeness of information we're provided.

The requirement should be imposed on all stock brokerages, any entity which sells stocks should be required to meet the conditions of the bill by hiring enough analysts to cover every publicly traded company. This guarantees investors the ability to seek multiple opinions and make the most informed decisions. It enables investors to comparison shop, and also guarantees all companies a chance to be evaluated.

This is a win-win bill. The majority of publicly traded companies are not covered by analysts, and would like to be covered. They would all rally in support of this bill. Shareholders would support this bill. Analysts would support this bill. Top executives of publicly traded companies, as well as all their workers, would support this bill.

People want and need options and information. Every financial firm should be required to provide these choices to all investors. This would help companies and shareholders and analysts alike. It's fair and helpful to all Americans, and would help stimulate massive growth in the stock market by improving the level and quality of services provided by financial firms. Please introduce and support this bill.

This bill works well for both Democrats and Republicans, because it benefits all publicly traded companies, employees, executives, shareholders, institutional investors, analysts, the economy, everyone gains from it. It would restore investor confidence, spur investment, stimulate job growth, and accelerate our economic recovery.


The writer is a Democrat from New York.

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