Investment bank JP Morgan today rejected a newspaper report that its analysts had been instructed to seek approval from corporate clients before publishing recommendations on their company's stock.
The
Times
newspaper said a memorandum circulated to JP Morgan analysts last week set out rules requiring analysts to seek comments from the companies concerned and the relevant investment banker at JP Morgan before publishing the research.
Mr Nick O'Donohoe, Head of European Equities at JP Morgan, said that such measures were a matter of communication and routine practice in the City financial community. He said the firm never changed a recommendation because of company pressure.
"It's important for no other reason than for factual accuracy. It's not in anybody's interests to see factual inaccuracies in research reports." he said.
But Mr O'Donohoe said the email, circulated to analysts and bankers in Europe, stressed that the independence and integrity of equity research was critical to the firm.
He said it was a matter of courtesy that analysts check factual accuracy with companies and let them know when a rating had been changed.
"We have influence in the stock market and if we change our recommendation that can clearly have a material effect on a company's stock price and we like them to hear that from us and not read it on the newswires. We never change a recommendation because of company pressure," he said.