And the commission found that more than one-quarter of the analysts who owned shares in a new company they followed, or whose firm did, issued buy recommendations within a week of the expiration of the lock-up period that limited the ability of insiders to sell shares. Such recommendations are called booster shots because they help keep the stock price aloft while insiders, including analysts, are selling.
Unger believes that full disclosure and investor education will inoculate shareholders against the ill effects of analyst biases. However, she did urge the self regulatory organizations, such as the New York Stock Exchange and the National Association of Securities Dealers, to align their rules, eliminating discrepancies that currently exist.
RSS