The National Association of Securities Dealers slammed a former Banc of America Securities telecommunications analyst for recommending stocks to the public while telling others to bet on their demise.
Analyst Andrew Hamerling was fined and suspended by the NASD, which found he told clients, including one hedge fund, to short (bet against) SBC Communications, in spite of his own “buy” recommendation on the stock – a practice known now to be common at the time.
“[S]hort SBC,” he wrote to a hedge fund, suggesting the money manager bet against the stock. “[I]t has nothing fundamentally sound going for it.”
The NASD suspended Hamerling for six months and imposed a $125,000 fee to be paid if he joins another NASD-regulated firm. Hamerling settled the case without admitting or denying the charges.
“Under the settlement Andrew Hamerling will not have to pay a penny, which is how it should be,” said Hamerling’s attorney, Jeff Kaplan, of the law firm Stier Anderson.
“It’s sort of a blast from the very recent past,” said Barry Goldsmith, executive vice president of enforcement. “While it may not be as prominent, given other problems regulators are dealing with, we haven’t forgotten about research,” he added.