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WASHINGTON, April 28 — The question was about tax loopholes and whether the 10 securities firms that agreed to pay $1.4 billion to resolve charges of wrongdoing by their research analysts would be able to squirm out of their plight by writing off their fines. It put the men behind the lectern at the Securities and Exchange Commission's headquarters on the spot.

But not Eliot Spitzer. "Maybe I can be a little less discreet," Mr. Spitzer, the attorney general from New York, chimed in. "I always try to be."

With that, he shifted the focus to Congress, urging lawmakers to act to close the loopholes, and insisting his office and the S.E.C. had done their jobs. Read the full story>>

Documents disclosed as part of yesterday's settlement show how Wall Street firms, in pursuit of investment banking fees, put the interests of their individual clients dead last.

As an analyst at Lehman Brothers told an institutional investor in an e-mail message, "well, ratings and price targets are fairly meaningless anyway," later adding, "but, yes, the `little guy' who isn't smart about the nuances may get misled, such is the nature of my business."

In a newly disclosed tactic, Morgan Stanley and four other brokerage firms paid rivals that agreed to publish positive reports on companies whose shares Morgan and others issued to the public. This practice made it appear that a throng of believers were recommending these companies' shares.

From 1999 through 2001, for example, Morgan Stanley paid about $2.7 million to approximately 25 other investment banks for these so-called research guarantees, regulators said. Nevertheless, the firm boasted in its annual report to shareholders that it had come through investigations of analyst conflicts of interest with its "reputation for integrity" maintained. Read the full story>>

Moving decisively to prevent bias in future research reports, the regulatory settlement announced yesterday bars Sanford I. Weill, chairman of Citigroup, and other senior officers from talking to Citigroup's research analysts on investment banking matters without a company lawyer present.

By highlighting Citigroup executives, regulators and prosecutors demonstrated their determination to stymie conflicts of interest within the investment bank's sprawling operations.

The restrictions, which Citigroup officials agreed to, are also the legacy of an unorthodox campaign by Mr. Weill, spelled out in previously undisclosed detail, to persuade Jack B. Grubman, his star telecommunications analyst, to change his rating on AT&T's stock from neutral to positive. Mr. Grubman had a neutral rating — Wall Street code for negative — on the stock from 1995 to November 1999, at which time he issued a new report with a positive rating. Read the full story>>

Most Wall Street firms and their executives, embarrassed by details in the industrywide settlement on how they duped investors to keep their corporate clients happy, have either kept quiet or issued statements of contrition for the lapses that occurred during the stock boom of the 1990's.

Then there is Philip J. Purcell, the chief executive of Morgan Stanley. According to Mr. Purcell, Morgan Stanley and its clients should not be disturbed by the firm's activities during the bubble.

Addressing an institutional investor conference in New York yesterday, Mr. Purcell said, "I don't see anything in the settlement that will concern the retail investor about Morgan Stanley."

His remarks to a packed ballroom at the Pierre Hotel lasted about 15 minutes. Taking questions, Mr. Purcell appeared to contradict directly the regulators' findings that Morgan Stanley had failed to disclose to investors that it had paid $2.7 million to other Wall Street firms to publish research on companies whose shares Morgan Stanley had underwritten. Read the full story>>