Table: Analysts Need to Be Analysts

A new industry code will try to get them back to basics. But that means giving up several roles:

RAINMAKERS: Analysts issue favorable reports before IPOs and when managers become eligible to sell their shares.

SOLUTION: Bar analysts from sharing in investment-banking profits.

BLIND OPTIMISTS: Last year, as the S&P 500 and Nasdaq swooned, 99% of all recommendations were "buy" or "hold."

SOLUTION: Require brokerages to distribute independent research.

SHAREHOLDERS: Many firms let analysts own stock in the companies they cover.

SOLUTION: Block analysts from profiting from companies they research.

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