Disgruntled investors are going after Wall Street again, this time accusing one of investment bank Morgan Stanley's high-tech mutual funds of making biased stock picks.
Recent lawsuits allege the Morgan Stanley Technology fund was influenced to buy and hold shares of companies that delivered huge investment banking fees - or could bring big business - the investment bank.
According to the lawsuits, the Morgan Stanley fund followed the biased recommendations of analysts of the company - decisions that cost shareholders millions of dollars since its inception in October 2000 portfolio.
The fund lost 48 percent in 2001 and fell another 50 percent in the first nine months of 2002. While Morgan Stanley strongly denied the allegations, I do not see how the management of the fund is somehow distinct from the other divisions of Morgan Stanley. Eventually, they all work for the same boss.
The suits also claim that the company had to make that investment banking ties with a number of companies whose shares were part of the portfolio. Tech fund undisclosed They also did not reveal that to buy the fund these tires could affect to sell. Calls or
Why do all this? For one thing, it is interesting to note that Morgan Stanley offered four of these funds in October 2000. Just around the time we sold our positions (October 13, 2000) and it became clear, at least for those of us who were tracking long-term trends, which is a major trend change had occurred.
More recently in the news it's been Merrill Lynch, which is a dubious deal that operations had failed energy trader Enron. Of course, the financial industry regulates itself so well that a $ 80 million payment to the SEC is sufficient to conclude this case without admitting or denying wrongdoing.
What is the moral of this story? While it is impossible to predict this alleged conflict of interest rules is certainly possible to have a disciplined approach and they are on the "right" side of the market, so you can avoid jumping aboard a sinking ship.
Ulli Niemann is an investment advisor and has been writing about objective, methodical approaches to investing for over 10 years. He eluded the bear market of 2000 and has helped hundreds of people make better investment decisions. To learn more about his approach and his FREE to find newsletter please visit:
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