Morgan Stanley's Mary Meeker Is Named in Lawsuits

Baldwin Louie — Wed, 01 Aug 2001 18:00:00 -0400

NEW YORK, Aug 1 (Reuters) - Mary Meeker, the Morgan Stanley
<MWD.N> analyst once dubbed "Queen of the Internet" for her
bullish reports on the sector, was named as a defendant in a
pair of lawsuits on Wednesday alleging she provided biased
research on eBay Inc. and Amazon.com Inc.

Meeker is the second high-profile analyst to be cited for
allegedly providing research that cost investors money. Henry
Blodget, her peer at Merrill Lynch & Co. Inc. <MER.N>, was
named in arbitration proceedings at the New York Stock Exchange
by a New York doctor claiming he lost $500,000 following
Blodget's advice.

Merrill paid $400,000 to settle the allegations, saying it
settled to avoid paying legal costs. All charges against
Blodget were dismissed, Merrill said. The plaintiff originally
sought $10.8 million in damages and losses.

Bala Cynwyd, Pennsylvania-based law firm Schiffrin &
Barroway, LLP filed the lawsuits against Meeker and Morgan
Stanley on behalf of Amazon and eBay shareholders. The suits,
which seek class action status, claim she she crossed over the
"Chinese Wall," referring to the solid separation that is
supposed to exist between analysts and investment bankers.

Some have questioned whether analysts are under pressure to
publish favorable research reports so their firms can get
lucrative investment banking businesses, like stock
underwriting and merger advisory, from the companies the
analysts cover.

Meeker put out recommendations and positive comments on
eBay and Amazon "not based on objective analyses, but rather on
her desire to attract and retain" the companies as Morgan
Stanley banking clients, the lawsuits alleged.

The lawsuits also claim Meeker's compensation was directly
tied to the amount of investment banking deals she brought in
for Morgan Stanley.

The suits were filed on the behalf of people who bought
eBay <EBAY.O> or Amazon <AMZN.O> shares between Aug. 1, 1998
and Jan. 22 of this year.

Morgan Stanley officials were not immediately available for
comment.

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Morgan Stanley's Mary Meeker Is Named in Lawsuits