J.P. Morgan Bans Bankers From E-Mailing Research
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J.P. Morgan Bans Bankers From E-Mailing Research

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J.P. Morgan Securities is moving its debt capital markets bankers to new e-mail servers as part of an effort to underscore the separation between research and origination.

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J.P. Morgan Securities is moving its debt capital markets bankers to new e-mail servers as part of an effort to underscore the separation between research and origination. A research head at a rival dealer said the move "sounds ridiculous" and to his knowledge other firms have not made similar moves.

J.P. Morgan is in the process of moving the internal accounts of its entire debt capital markets staff to a new e-mail server, while equity research professionals will remain on their own server. The switch will allow the firm to institute a "system-enforced e-mail block between debt capital markets and equity research in the U.S.," according to an internal memo obtained by BW. It further states that the block is being put into place as part of the firm's compliance with the equity research settlement and "mitigates the risk of improper communication between [research and debt capital markets]." A debt capital markets banker said members of the group have also been instructed that they are not allowed to call a colleague in the research department without an internal compliance officer listening in on the call.

It is unclear whether the server block will also be imposed on fixed-income research professionals. Michael Dorfsman, spokesman, noted fixed-income credit analysts were recently moved to the ninth floor of the firm's Park Avenue offices, away from the originators who sit on the fourth floor. He was unable to provide more information on the e-mail block by press time.

The effort to physically and electronically separate research and banking come as other firms are also taking steps to ensure research objectivity--and limit their liabilities. Merrill Lynch, Banc of America Securities and Credit Suisse First Boston are independently considering increasing the disclosure statements that accompany the fixed-income research they produce (BW, 7/26).

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