Reverse Spin: Open season on analysts heats up …

Off with her head!

That’s more or less the outcry investors were making last week against the “Queen of the Internet,” Mary Meeker.

The well-known Morgan Stanley Internet analyst was named as a defendant in a pair of lawsuits last week alleging that she provided biased research on eBay Inc. and Amazon.com Inc. The suits seek class-action status.

The suits, filed in New York federal court, claim that the only reason Ms. Meeker told investors to buy the stocks was to attract the companies as investment banking clients of Morgan Stanley.

The move comes on the heels of a similar arbitration case against Merrill Lynch & Co. Inc. Internet analyst Henry Blodget. Merrill settled the case last month for $400,000.

The suits were filed one day after analysts were again blasted on Capitol Hill.

Laura Unger, acting chairman of the Securities and Exchange Commission, told a congressional committee that at most brokerage houses, the right hand doesn’t even know what the left is doing.

She said that nearly all major firms examined by the SEC were unable to identify their employees’ investments, including those of analysts.

She also said that three analysts made off with $100,000 to $3.5 million by making stock trades that went against what they had been telling investors to do.

… yet others want to woo them

Analysts may be the pariahs of Main Street, but corporate America hasn’t given up on the derided bunch yet.

In fact, a majority of companies think analysts are too pessimistic.

According to a PricewaterhouseCoopers survey released last week, many U.S. companies think Wall Street just doesn’t appreciate them.

Nearly two-thirds of business leaders in the survey said their company’s shares are undervalued. And believe it or not, they attributed that to analysts’ being overly pessimistic about expectations of revenue and earnings growth.

And 58% of the respondents plan to spend more time wooing analysts to boost share prices.

Investor ignorance

Can anyone blame investors for trusting analysts?

A new study suggests that investors would be hopelessly idiotic if they relied on themselves.

The study, released last week, shows that at least four out of five investors failed an “investor survival” quiz developed by the Securities Investor Protection Corp. and the National Association of Investors Corp.

Among the more disturbing findings: Fewer than one out of five investors polled knew that no insurance covers losses in the stock market or losses from simple investment fraud.

No wonder they’re now blaming the Meekers and Blodgets of the world for their stock market losses.

FPA gets vocal

The Financial Planning Association is keeping its promise of being more vocal in Washington.

The day after the Senate confirmed Harvey Pitt as the next chairman of the SEC, the FPA offered its congratulations to him.

The statement of support was quickly followed by a description of the group’s plan to try recruiting Mr. Pitt into its corner in the battle over the broker-dealer-exemption rule.

The rule, which has been pending since 1999, would exempt certain brokers from registering as investment advisers under federal law. Specifically, it would require only those brokers who have discretion over assets to register if they offer advice.