Tuesday, Jun. 30, 2009

Pumping and Dumping

To: Finance-industry insiders

From: Henry Blodget, Merrill Lynch analyst

Re: Star tech analyst Blodget became a poster boy for the corporate collusion that helped fuel the 1990s dotcom bubble after his e-mails were subpoenaed and released in 2002 by then New York Attorney General Eliot Spitzer. The messages revealed that as the high-flying analyst was talking up stocks on television and elsewhere, in private he was deriding the same equities as "junk," "crap," "a powder keg" and worse — a dishonest practice that many analysts embraced. (The companies Blodget was promoting had business ties or potential ties with Merrill's investment-banking arm.) Blodget later paid $4 million in penalties and was banned for life from the securities industry.

Excerpt: "LFMN [a company called Lifeminders] at $4. I can't believe what a POS [piece of s___] that thing is. Shame on me/us for giving them any benefit of the doubt. — Blodget