In a follow up to the $1.4 billion global equity research settlement, the Wall Street Journal recently reported that U.S. regulators are investigating whether bond investors have been misled by slanted or biased Wall Street research.
The WSJ reported that SEC officials told the Bond Market Association in February, that they are looking into possible conflicts of interest between bond analysts, brokers, and traders. The WSJ noted that the SEC is not focusing in on any one company or alleged conflict, but may do so later. The SEC, however, is studying whether federal rules are necessary for bond research, the Journal reported.
After all the hoopla and negative press surrounding biased equity research, allegations of tainted bond research would come as another black eye to Wall Street firms. It is getting to the point where being a Wall Street research analyst will soon carry the same stigma as saying you are the CEO of a publically traded company!