Is Honesty Important to Wall Street?

Evidence from a court case shows that Merck (MRK), working through Elsevier (ENL), did some fancy marketing footwork.

The Scientist, a source we read daily, broke the story, Merck published fake journal.

The company paid the publisher to create a couple of issues that appeared to be a peer-reviewed scientific publication. Instead, it was a collection of reprints with a masthead of names from the scientific advisory board.

The Scientific Misconduct Blog has more detailed coverage.

Does it Matter?

The question for investors is whether this matters at all. In a perfect world, scientific integrity and respect for peer review would be important.

In the actual world, we doubt that investors care. Some may even see this as astute marketing.

It is an interesting object lesson about what matters on Wall Street.

Disclosure: No Positions

Comments

[redbaron:]

I am a long time investor who has had indirect contact (through my working years) wtih the drug companies for decades, but am now retired, and I can only speak to what matters to me; honesty does matter, and I don't regard mis-use and manipulation of scientific data to be creative marketing. Most informed doctors and scientists know that the drug companies have been manipulating this data for many years, to get the results that they will produce the best financial rewards. I currently do not own any drug company stocks, and behavior such as described in these links is the reason. I just don't trust them to provide accurate scientific information on the drugs that they want me to ingest, and invest in. I will continue to investigate on my own, and draw my own conclusions.

May 03 04:35 PM

[Top Gun:]

Safety and efficacy matter. If they are misrepresented, we have a problem.

Investors are secondary in all product communications, whether pharma or cell phones. If we treat the customer appropriately, the investor will have the proper information to make rational investments.

May 03 05:13 PM

[Marianthi:]

Since bad drugs kill people, YES this matters...

May 03 10:27 PM

[Jeff Miller:]

I am delighted to read the reactions to this article. I only wish there were more.

Unfortunately, most seem not to care and there is no real dis-incentive.

I really appreciate those who took the time and trouble to comment.

Jeff

May 03 11:29 PM

[Tom Armistead:]

Jeff, I read the article with interest but with dishonesty as pervasive as it is on Wall Street sleazeball conduct by a drug firm is too much like business as usual, hardly noteworthy.

May 04 08:18 AM

[Tony Daltorio:]

Jeff - good article! But saying dishonesty and Wall Street in the same sentence is like the saying the sun rose this morning - it's a given.

May 04 09:09 AM

[gizmo:]

Any company purposely misleading the shareholder should be fined by the SEC to the point that it is not worth while doing it again

May 04 02:35 PM

[notsosmart:]

the word honest was lost on wall st long time ago.its all ponzi.im not sure its still on main st.here & there in small town usa maybe.its a surprise for most if they encounter it.ok-name who you really trust? a lot are just cheating scoundrels but worse are the make believes that know nothing & give out advice & info that benefits them & may hurt you.50% of all high school students drop out. of those that make it to college 50% drop out the first year.how dumb can this country get? you will soon find out if you havent experienced it up to know.

May 04 04:15 PM

[notsosmart:]

sorry-last word should be now.

May 04 04:16 PM

[PainfullyAware:]

Honor and Shame are concepts that seem to have left the "Big Business Model".

I wish this was not the case.

It seems that the Modus Operandi is "With Opacity - Who Needs Honesty."

May 04 07:17 PM