The function of an investment bank is to get people to buy and sell securities, Matt Levine suggests. Should the clients accept the recommendations or question them.

Of course, in order for a security to change hands, one party has to buy and the other has to sell.  Can the same person perform both functions full-heartedly?

The Financial Regulatory Aurhority fined Citibank $15 million for mixed behavior.

For example, at an idea dinner that occurred in July 2011, a CGMI equity research analyst identified a stock as a “short” pick. Before the dinner, however, the analyst had upgraded that stock from Sell to Hold and reiterated his Hold rating on the company in the last report that he published prior to the dinner. Thus, the analyst’s characterization of the company as a “short” pick was inconsistent with his published research on the company at the time. Moreover, the analyst identified other companies, on which he had Hold or Neutral ratings, as “short” picks at six subsequent idea dinners between October 2011 and June 2013. These picks were therefore inconsistent with the ratings identified in the analyst’s published research.

Analysts have to certify in writing that they believe what they are saying.  Is this possible?  To Buy, To Sell or To Hold, That is the Question