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Walgreen Co.

stock buyback policies

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For the full report of the study referenced below, see


Source:, April 15, 2013 posting

April 15, 2013

Financial Analyst Survey: "Chinese Wall? Reg FD? Never Heard of Them..."

This new study about sell-side equity research analysts entitled "Inside the 'Black Box' of Sell-Side Financial Analysts" by Profs. Brown, Call, Clement & Sharp may surprise you - or it may not given all that is wrong with this world. The findings are disturbing, including:

- Analyst compensation - 44% of the analysts surveyed indicate that their success at generating underwriting business or trading commissions is very important to their compensation (see page 43).

- Private communication with management - Analysts rated private phone calls with management as the most useful form of direct contact with management of the companies they follow. Further, the analysts specifically responded that private communication with management is very useful for determining their earnings forecasts and stock recommendations. In interviews, analysts said their private phone calls with management provide color and granularity and that management is more candid on private calls than public calls. Analysts said they get to check their model assumptions on private calls, and that management goes into details on private calls that they aren't willing to discuss on public calls (see discussion from pages 23-25). Thus, the analysts appear to be receiving private information (from these calls) that benefits them directly in terms of their performance.

Meanwhile, in this survey of hedge fund professionals - commissioned by Labaton Sucharow, HedgeWorld and the Hedge Fund Association - 46% said they believe that their competitors engage in illegal activity, 35% have personally felt pressure to break the rules, and 30% have witnessed misconduct in the workplace. When asked if they would blow the whistle or report the misconduct, 87% of respondents said they would report wrongdoing given the protections and incentives such as those offered by the SEC Whistleblower Program.


- Broc Romanek

Posted by broc at 7:05 AM



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