The Math of Undertracking

[amirnetz]

nephel said:

I do not recall analysts having buddy-buddy relationships with Enron. I do recall Enron having fairly acrimonious relationships with analysts...

Enron discriminated against analysts the did not support the company valuation. They released information to friendly analysts and blocked and pressured the unfriendly. They blocked the analysts access to information and pressured the analyst firm and parent firms. 

Here are some headlines:

MERRILL REPLACED RESEARCH ANALYST WHO UPSET ENRON

http://query.nytimes.com/gst/fullpage.html?res=9B07E5DD1138F933A05754C0A9649C8B63

Ex Citigroup VP questioned Enron relationship -WJS

http://www.reuters.com/article/companyNews/idUSN2146350820080321

Ex-Analyst at BNP Paribas Warned His Clients in August About Enron

http://pages.stern.nyu.edu/~adamodar/New_Home_Page/articles/enronsage.htm

"The side benefits to the securities firms can be enormous: If an analyst touts a company's securities, the securities firm stands a greater chance at becoming an adviser to that company, and garnering the fees that will follow. Nowadays, analysts can be stars, receiving bonuses of several hundred thousand dollars for helping their firm to win big underwriting deals. Bash the securities of a corporate client, though, and the securities firm could be shut out of lucrative deals. Enron issued billions of dollars worth of securities in recent years, generating huge fees for its financial advisers and bankers."

To be clear - this is just a small part of their misconduct. The accounting and fraud was a much larger issue.