Henry Blodget, the former
Internet analyst whose rosy stock picking made him a poster boy for bubble-era excess, reportedly will be fined $4 million by securities regulators and barred from Wall Street for life.
The penalty is part of the long-awaited global settlement of probes into various misdeeds by the securities industries over the past decade -- primarily shoddy and conflicted stock research. Blodget, who reportedly collected a $2 million
settlement when he left Merrill in November 2001, epitomized the phenomenon, reportedly touting the stocks of questionable Internet companies while simultaneously lambasting them in emails with colleagues.
fine is part of a larger settlement in which about a dozen firms will pay roughly $1.4 billion to put to rest allegations that their research departments were systematically compromised by motives tied to winning investment banking business. Blodget will neither admit nor deny wrongdoing, the
Wall Street Journal
The newspaper also said the settlement will be occasion for the formal announcement of a $15 million penalty to be paid by one-time Salomon telecom analyst Jack Grubman. Grubman, who was similarly overoptimistic about stocks in his sphere of coverage, will also neither admit nor deny guilt and be barred from the securities industry for life.
reported that among banks taking part in the settlement, Salomon parent
will face the stiffest new regulation, including a banning of contact between Chairman Sandy Weill and the research department. Questions arose during the investigation about whether Weill influenced Grubman's opinion on
shares while Salomon sought investment banking business from the company.