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    Conflict of Interest between Security Analysts and Investment Bankers

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    1) Given the potential conflict of interest between Security Analysts, and the Investment Bankers working for the same firm - what are the potential solutions that exist to remedy the situation?

    2) Are they ethically bound to work together in the best interest of their clients?

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    Interrelated work between security analysts and investment bankers:
    From the business point of view work of both security analyst and Investment Banker is interrelated. If investment bankers recommend to a corporate client that stocks and/or bonds be sold to raise capital, then the investment bank will also distribute, market, and sell the securities. Through their analysis and recommendations, security analysts often play a key role in the marketing of new security offerings. In addition, through their contact with corporate senior management, security analysts can also play a significant role in generating new corporate finance clients for the investment banking firm.

    The inherent nature of work leading to conflict if both working for same firm:
    Security Analysts, and the Investment ...

    Solution Summary

    The solution discusses the conflict of interest between security analyst and investment bankers.