Spitzer gathered internal documents showing that stock analysts such as Salomon Smith Barney's Jack Grubman publicly rated some stocks a "buy" while privately saying the company would under-perform.  In an email obtained by investigators, Grubman told colleagues one such recommended company was really a "pig".  These Wall Street firms issued these "tainted" research reports because of lure of big fees from investment banking services the Wall Street firms could offer the companies being rated.  These conflicts of interest rendered "independent" analysts mere spokesman for the companies who stocks were rated.

Damages from misleading and fraudulent stock recommendations were felt in nearly every American home.  Millions of small investors lost billions of dollars.  Personal savings, IRAs and 401K accounts evaporated as high-flying stocks lost 90% or more of their value in less than 3 years.  While stock prices remain low, clients may be able to recover some of their losses through suits against the investment houses.

The Spitzer agreement, though large by Securities and Exchange Commission standards, recovered only a fraction of the money lost on bad investments.  SEC Chairman William Donaldson told a May 7th hearing of the Senate Banking Committee that the settlement will also help investors who seek to recoup losses through civil lawsuits and private arbitration claims.

"What (Merrill Lynch) did was shift risk to unknowing investors" while the firm collected its fees up front, Spitzer said...and that's fraud.  5/7/03 Columbus Dispatch (Ohio).

Brokerage houses such as Merrill Lynch, Citicorp, Morgan Stanley and CSFB (Credit Suisse First Boston) are already named in dozens of lawsuits.  The issues involve companies whose names became familiar in many households such as GoToDotCom, Excite@Home, eToys, Internet Capital Group, CMGI, Corp, Lycos, Ubid and many others.

Further government investigation is likely to disclose more evidence to support the claims.