WASHINGTON Merrill Lynch analyst accused of wrongdoing

WASHINGTON (AP) -- In a new case of alleged analyst misconduct, the National Association of Securities Dealers has accused a former Merrill Lynch analyst of issuing misleading reports on a company he covered, Tyco International Ltd., while conducting a too-close relationship with Tyco officials.
The analyst and managing director, Phua Young, gave a $4,500 case of wine to Tyco's former CEO, Dennis Kozlowski, and flew several times on one of Tyco's corporate jets for business trips, often accompanied by Kozlowski, the NASD said Wednesday in a civil complaint.
Young, 48, of Forest Hills, N.Y., could face a fine and suspension. He also could be barred permanently from the securities industry. His attorney, Christopher Wilson, said Young is disputing the accusations through the NASD's hearing process.
"We intend to fight this vigorously," Wilson said. "We think the complaint is without merit ... [and] reflects a fundamental misunderstanding of what a good analyst does in order to be effective."
Young gave Kozlowski the wine as a wedding present, and the Tyco CEO "flipped him back a case of champagne" when Young married, Wilson said.
The action by the NASD, the industry's self-policing group, put a new twist on charges of deception and conflict of interest on Wall Street. Previous allegations have concerned the conflicted relationship between analysts and investment bankers in their Wall Street firms. In the Young case, it is the ties between the analyst and companies he researched that are said to have created the problem.
The action against Young comes a month after the Securities and Exchange Commission, state securities regulators, the NASD and the New York Stock Exchange announced a record $1.4 billion settlement with 10 Wall Street brokerages over alleged deception of investors by issuing biased stock recommendations to lure investment-banking business.