Prudential Securities Muzzles Analysts

Mum’s the word at Prudential Securities as the brokerage Thursday began prohibiting its analysts from talking to the media, saying in an internal memo it wants to focus solely on clients.

Critics have accused Wall Street analysts in general of issuing overly bullish reports to help their banking colleagues win underwriting and advisory work from companies. But Prudential, a unit of insurance firm Prudential Financial Inc., has described its research as “unfettered” because it dropped investment banking nearly two years ago.

Now, Prudential is the first big firm known to muzzle its analysts, even though it has been featuring them in a television advertising campaign.

“As a result of this new policy, our fundamental analysts will not provide additional commentary on their published reports to live and printed news media,” head of research Steve Buell said in a memo to employees obtained by Reuters.

Published reports still will be available for the media to quote, Buell said, and market strategists, economists and Washington analysts can still “provide their thematic comments and insights” to the media.

The new policy may be a backlash against the harsh criticism researchers are facing, one company source said.

But a Prudential spokesman said that was not the case.

“We started out by separating our research from the investment bank. Now we’re separating our investment commentary from it reaching people who don’t pay for it through any medium,” spokesman Jim Gorman said. “It’s not an anti-media policy.”