Will Analyst's Stiff Fine Silence Others?

The New York Stock Exchange's decision to punish former banking analyst Tom Hanley for aggressively spreading a merger rumor has left other outspoken stock analysts wondering just how far they can go when communicating market chatter to the public and their clients.

Some research comrades believe that Hanley went too far when he circulated a potentially market-moving rumor in September 1997 about a possible Travelers' takeover of Bankers Trust. While few analysts see the same fate befalling them, they agreed the NYSE's move got their attention. (A recent TSC story looked at the evolving role of and pressures faced by analysts.)

The NYSE's action "does make you pause a bit. You must be careful. But, then again, I've always known that I have to be careful," says Claire Percarpio, banks analyst at Janney Montgomery Scott in Philadelphia. ...