What term might be used to describe an underwriter who influences an analyst in the same firm to modify a report so as to create a favorable impression of a securities issue?
A)SOX compliance
B)spinning
C)conflict of interest
D)Chinese wall

Question

Quizplus · Accepted Answer

This scenario would be considered a conflict of interest, as the underwriter's actions are motivated by their own financial gain rather than the best interest of the client. This is considered unethical and can be illegal. SOX compliance refers to regulations put in place by the Sarbanes-Oxley Act to improve transparency and accountability in corporate financial reporting. Spinning refers to the practice of underwriters giving preferential treatment to certain investors in the allocation of IPO shares. A Chinese wall is a virtual barrier put in place to prevent conflicts of interest and ensure confidentiality within a firm.

What Term Might Be Used to Describe an Underwriter Who