In Senate hearings testimony was given by David Tice of David Tice and Associates. He testified that, “an analyst is just a banker who writes reports. No one makes a pretense that it’s independent.” He quotes Sean Ryan, a former banking analyst at Bear Stearns Co. when he explained his reasons for recommending NetBank like this: “I put a buy on it because they paid for it.” Ryan said he told clients that “we just launched coverage on NetBank because they bought it fair and square with two offerings.”
Further, Greg Hymowitz of Entrust Capital, a financial house for wealth investors and a former Goldman Sachs employee. He testified in defending current practice, “Investing is as humbling as golf. Every day is riddled with mistakes. Unfortunately, often the only way to learn in this business is from mistakes and that costs money. Investors have learned a hard lesson: with huge rewards come equally huge risks. The bubble has burst. Investors should not believe everything they read, hear or see.”
Shouldn’t we be able to believe someone? And who would that someone be?