Telling Congress About the Rigged Research Game (Cont'd)

Editor's note: TheStreet.com columnist Adam Lashinsky is testifying today before the House of Representatives Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises. The committee is investigating the quality of equity research and reporting available to the average U.S. investor. We are running Lashinsky's testimony in full and in three parts. This is the third and final part.

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This committee is better off hearing from analysts about the pressures analysts face. But I talk to analysts and their clients every day, and I can give you some insight. One prominent analyst I know once described his job as having to be willing to come into work each day and get clobbered repeatedly by a two-by-four. Who's delivering the punishment? By turns: Retail brokerage clients unhappy with a recommendation that didn't work out, companies bothered by unfavorable commentary, institutional brokerage clients displeased at not getting the early word, investment banking colleagues peeved that some report hurt a deal. And so on.

This isn't to make you feel sorry for analysts. It's just that one begins to understand how a profession so badly conflicted could try so hard to please so many and end up pleasing so few. ...