Integrity Research Launches New ResearchFocus Service

New York—May 21, 2007—Investors are spending $60 million a year to purchase forensic accounting research, according to a new service released by Integrity Research, a specialist firm which evaluates investment research. Forensic research, which analyzes companies for accounting irregularities, is now one of the fastest-growing areas of investment research.

The study is included in a new service called ResearchFocus which reviews and evaluates the research firms in each sector of the research industry. “We began with forensic research because our clients kept asking us about firms in the sector,” said Michael Mayhew, founder and chairman of Integrity Research. “Given the global interest in this sector, we are projecting a 20% annual growth in spending on this type of research over the next five years.”

Over the past five years, the number of firms providing forensic research to investors has more than tripled from six firms to nineteen. With more countries adopting the International Financial Reporting Standards (IFRS), forensic research is expanding internationally, as globalizing U.S. firms compete with local providers in the U.K. and Canada.

“Investors like forensic research because it has something most Wall Street research lacks: sell recommendations,” Director of Research Tom Hutchinson said. “Hedge funds like forensic research as a source of short ideas and long-only investors like it because it helps them avoid stocks which can torpedo a portfolio.”

Recent examples of the value of forensic research were timely calls on subprime lender New Century Financial Corporation months before its stock was delisted in March of this year. In an August 2005 report, Gradient Analytics Inc. flagged heavy selling of shares by New Century’s three founders as a sign that prospects for the company were clouding. In November 2006, the Center for Financial Research and Analysis (CFRA) identified concerns about New Century’s third-quarter 2006 earnings release.

Integrity’s ResearchFocus report reviews the providers of forensic research and earnings quality analysis, in addition to related firms which specialize in providing short recommendations. “We were surprised by how vibrant this research sector is,” said Will Greene, an analyst at Integrity. “New firms are jumping into this space, while the existing firms are developing new services. Analysis is now spreading to legal risks and governance issues generally.”

Integrity’s new ResearchFocus service will review additional research sectors in the coming months including primary research firms which offer “channel checking”, and specialists in researching small cap stocks, among others. The service is designed for buy-side directors of research, analysts, portfolio managers, and broker liaison professionals.

ResearchFocus reports compare and contrast the strengths and weaknesses of each research firm, and make recommendations on how best to use the firm’s research. Reports include Integrity’s Top Picks for the sector plus profiles of new firms which Integrity views as the “up and comers” in the sector.

For additional information on ResearchFocus and a complimentary copy of the executive summary of the current review of forensic research firms, go to or contact Matt Bannister at 212.845.9088 x6851 or

About Integrity Research

Integrity Research Associates, LLC is the only research firm focused on the fast-moving investment research industry itself. Integrity Research’s analysts cover over 1,200 research firms and other sources of investment research in the U.S., Europe and Asia, collecting information on performance, analytic resources, business strength, research style, coverage and potential conflicts. Integrity’s clients are research directors, analysts and portfolio managers within money management firms and hedge funds. Additional information about Integrity can be found at

For further information contact:
Michael Mayhew
212.845.9088 x6859