Investment banks are guilty of conflict of interest when they
A) pressure their analysts to produce research favorable to their client firms.
B) permit executives of client firms to alter analysts' research on their firms.
C) prohibit analysts from making negative or controversial comments about client firms.
D) all of the above.

Question

Quizplus · Accepted Answer

All three options represent situations where investment banks may prioritize the interests of client firms over the interests of investors or the public. By pressuring analysts to produce favorable research or prohibiting negative comments, investment banks may be providing biased information to investors. Allowing client firm executives to alter analysts' research can also lead to the manipulation of information. All of these actions can compromise the integrity and objectivity of investment bank research, and thus represent conflicts of interest.

Investment Banks Are Guilty of Conflict of Interest When They