In a Wall St. Hierarchy, Short Shrift to Little Guy

Documents disclosed as part of yesterday's settlement show how Wall Street firms, in pursuit of investment banking fees, put the interests of their individual clients dead last.

As an analyst at Lehman Brothers told an institutional investor in an e-mail message, "well, ratings and price targets are fairly meaningless anyway," later adding, "but, yes, the `little guy' who isn't smart about the nuances may get misled, such is the nature of my business."

In a newly disclosed tactic, Morgan Stanley and four other brokerage firms paid rivals that agreed to publish positive reports on companies whose shares Morgan and others issued to the public. This practice made it appear that a throng of believers were recommending these companies' shares. (...)

But because greed is a part of human nature and human nature seldom seems to change, Alan Bromberg, professor of securities law at Southern Methodist University, remains skeptical that the terms of the settlement will bring substantive change to Wall Street.

"I don't see this as a great reformation," Mr. Bromberg said. "I don't see this as a new world we are moving into. The pressures are still going to be there. Brokerage firms don't make money other than by selling securities, so they're going to inevitably be encouraging people to buy and will always have pressures to hype what they think is good or what they're otherwise involved in."
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This illustrates the whole fallacy of the "free market". A free market depends on everyone having the same information. Those that run the "free market" do everything the can to keep that from happening. Investing in stocks is investing in a game that is even more rigged that the gambling tables in Las Vegas. At least the casinos in Las Vegas are honest about it.