Lost out in the dot-com crash? Why not sue an analyst...

A disgruntled doctor has got legal on the analysts who advised him. Nowadays, doctors can get sued for sneezing at the wrong time, so perhaps the pressure got to him. Anyway, he got his toes caught in the dot-com crunch, and now he wants someone to blame - and $10m to take the pain away.

Dr Kanjilal claims he was tricked into making unwise investments by corrupt analysts. He's turned on one analyst in particular, Henry Blodget, who works at Merrill Lynch and was one of the names most associated with the dot-com bubble.

But Kanjilal doesn't stand much of a chance according to the silicon tipsters. If there's one thing you can trust an investment bank to do, it's to cover its ass. With Merrill's money and legal muscle against him, it's a case of David against Godzilla, and this time David hasn't even got a sling.

The dot-com bubble, which made the likes of Merrill so much money, also parted so many investors, small and large, from their hard-earned cash. But how guilty are these analysts for creating this mess?

The answer is, very guilty. We wouldn't want to pin any blame on Mr Blodget himself, not without seeing the evidence, anyway. There's quite enough suing going on without us getting involved. But surely the whole business of brokerage research is fundamentally corrupt?

Picture the situation - a bank is about to do a major deal with a company, a takeover for example. If the analyst says "buy", the stock goes up, the m'n'a people get the takeover, the bank makes a killing. If the analyst says "sell", the stock price goes down, and the deal goes elsewhere, or it doesn't happen at all.

In their defence, the investment banks argue that they have "Chinese walls", that the analysts operate separately from the m'n'a teams. Besides, if the analysts only acted in the interests of the bank, no one would believe them, would they?

Although no one should take what analysts say as gospel, greedy people will always want to believe them. If an institution with the clout of Merrill Lynch says "buy", it takes a cool head to say no. Especially if the Nasdaq is shooting skywards like a nuclear missile the hour before Armageddon.

So fire all the analysts? No - better to keep them off the streets. Perhaps they should just cross out the "analyst" on their creamy white business cards and replace it with something more appropriate. Like "salesman".