Wall Street WARZONE
Wall Street’s “Numbers Game:” Fudge Stats, Fix Odds, Scam Main Street
by Paul B Farrell, JD, PhD
| Discuss | | 2/19/2010

There are so many clever ways Wall Street can selectively manipulate and control the data available to investors, with the direct or indirect help of the SEC and Congress: In the timing and disclosure requirements in advertisements; burying key data in a prospectus; using information that is outdated, often three months to a year or more old, for example.

Wall Street also has many dealings with data trackers like Morningstar, Lipper, Moody’s, Standard & Poor’s and others supposedly independent suppliers of data investor rely on. Wall Street not only buys data from these sources, they often use their related subsidiaries to do marketing research. Cozy relationships with so-called “independent” data sources supplying data to Main Street investors get the tacit approval of politicians, regulatory agencies, private industry and the media and offer many opportunities for data manipulation. For example, when a poor performing fund is closed or merged out of existence, its statistics also disappear, that makes the survivors and their category look better than they are. (More)