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.