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Shareholders Research Alliance
Overseer Jerry Davis On Board After Hurricane Katrina
October 10, 2005 (FinancialWire) The Shareholders
Research Alliance finally has an acceptance from the
fifth member of its Oversight Advisory Group, Jerry
Davis, chair of the New Orleans Retirement Board, after
a post-Hurricane Katrina period when his welfare and
availability was unknown, and he was unreachable.
Davis, whose pension fund’s major holdings include Yum!
Brands (NYSE: YUM), Walt Disney Co. (NYSE: DIS), and
Comcast (NASDAQ: CMCSK), is currently residing on a
Carnival (NYSE: CCL) ship, or as he and his fellow
campers call it, “FEMA Cruise Lines.”
Recently the new Shareholders Research Alliance chair,
Dirk Koerber, Woodland Hills, CA, a private investor and
former Vice President, Investor Relations at Litton
Industries, a division of Northrop Grumman, outlined
that organization’s plans to begin monitoring sponsored
independent research. The text and webcast is at
http://www.shareholdersresearch.com
Davis’ home was not among those hardest hit, but it is
still inaccessible to him. He said his current living
arrangements were “widely reviled in the press but much
appreciated here, where living accommodations are in
very short supply. I'm also very excited to be part of
this effort to improve information for investors, and to
be invited to join such an august group of individuals”
involved in the Shareholders Research Alliance.
Davis is no stranger to either conflict or maritime
relief measures. He served 18 months as an infantry
soldier; nine years as a military medic, followed by 29
years as a Coast Guard officer, with responsibilities
including maritime inspections and law enforcement,
military logistics and war readiness planning; and two
years as the Commandant's liaison to the U. S. Readiness
Command. He was selected three times to command of
various Coast Guard Reserve units; and retired with rank
of Commander in 2002.
He was first elected to represent City employees on the
New Orleans Retirement Board in 1986, and reelected
seven times, and then elected Board Chairman and chief
investment officer in 1994.
Davis is founder and president of the Board of Governors
of the Council of Louisiana Trustees, a non-profit
educational association of and for fiduciaries, which
from 1995 through 2003 held some of the largest national
conferences for trustees in the United States.
He has led three successful Securities Litigation
actions on behalf of the New Orleans pension fund and
others, two federal and one state, and was appointed to
the New Orleans Civil Service Commission in 2005.
Davis said he is a “voracious reader and a very
persnickety proofreader. My investment advisors know
that I read every report they submit, and I meet with
approximately 20 marketing representatives every
month.” He speaks at investment conferences several
times a year.
The SRA’s chair, Dirk Koerber, outlined the
responsibilities of the Oversight Advisory Group, which
he chairs, in a webcast and transcript at
http://www.shareholdersresearch.com/news.html
during the recent SEC Forum on Small Business in San
Francisco. The SRA is an outgrowth of the global
research settlement against ten banks, including three
charged with fraud, Citigroup’s (NYSE: C) Salomon Smith
Barney unit, Merrill Lynch & Co. (NYSE: MER) and Credit
Suisse First Boston, a unit of Credit Suisse Group
(NYSE: CSR), and the subsequent growth of corporate
sponsored analytics.
Shareholder research monitoring is considered the newest
and perhaps most innovative idea so far to rid
independent equity research of all vestiges of potential
conflict or bias. The SRA has elected five public
Overseers to monitor research procedures of independent
providers. The organization’s website is at
http://www.shareholdersresearch.com
Koerber said that elections for Overseers, all private
investors, and which also includes Bob Reisner, Atlanta,
CEO of Nassau Business Funding & Services, Vice Chair;
Anthony J. Cataldo, Ph.D., CPA, CMA, Assistant Professor
of Accounting, Oakland University, Rochester Hills, MI;
Jerry Davis, Chair, Board of Trustees, New Orleans
Employees’ Retirement System, New Orleans; Gary
Ferguson, a retired engineer in El Prado, NM; and Carlos
E. Boggs, Chair Emeritus, and premium audit manager for
a major insurance company, San Antonio, Texas, will be
held annually. Elections are for two-year terms.
After the settlements, the market began to turn to
subscriber-paid and corporate-sponsored independent
analytics such as Investrend Research that Investment
Dealers Digest recently cited for “lighting a candle”
for the growing number of public companies that
otherwise would “have become invisible on Wall
Street.”
Many subscription-based models as well as
corporate-sponsored models continue to have conflicts
such as either the provider or the analysts, or both,
holding stock in companies under coverage, lacking full
disclosures, or providing consulting or promotional
services for companies covered. To counter this
perception and practice, a dozen or so independent
research providers joined in 2003 to promulgate and
adopt the “Standards for Independent Research Providers”
at
http://www.firstresearchconsortium.com/standards.html
Now a half dozen whose research are distributed by
Investrend Research Syndicate, including Beacon Equity
Research, Richardson, TX, Burritt Research, Lake Park
FL, Fundamental ResearchCorp., Vancouver, Investrend
Research, Forest Hills, NY, SISM Research & Investment
Services, Zurich, and ValueNotes, Pune, India, have
taken what they believe to be the penultimate step of
submitting their research to shareholder monitoring by
the Shareholders Research Alliance.
The group’s catchphrase is “No Conflicts. No Bias.
Shareholder Monitored Analytics & Visibility.”
Shareholders Research Alliance company-specific chapters
will be formed in coming weeks, and each of those
chapters may elect a company-specific Overseer to more
closely monitor the research procedures and practices
for each covered company, as well as to actively
advocate coverages for companies that are not now
supplying independent research to their investors.
Cataldo, an author who has conducted academic research
in the area, said “we are in a paradigm shift from a
‘free’ to a ‘fee-based’ system of stock analyses.”
The Shareholders Research Alliance and the concept of
shareholder monitoring developed out of testimony and
dialogue that Investrend’s CEO, Gayle Essary, had with
the SEC Advisory Committee on Smaller Public Companies
at its New York hearing in June, 2005. While the SEC
has not been asked to endorse the new effort, Essary
submitted requested follow-up public comments to the SEC
expressing his belief that the Shareholders Research
Alliance will help to resolve many of the committee’s
objectives for increased market liquidity for smaller
public companies and enhanced credible information
distributions to shareholders and the marketplace.
Those follow-up comments are at
http://www.sec.gov/rules/other/265-23/gessary091305.pdf
as part of the hearings record at
http://www.sec.gov/rules/other/265-23.shtml
“We are delighted to submit our procedures and practices
to public review,” said Essary. “Since anyone can join
the SRA, analytics facilitated and distributed by
Investrend Research Syndicate is no longer a matter of
trust. Now shareholders can look over our shoulders.
“It’s a good day, maybe even a new day, for the
investment community.”
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