A case in point is the ongoing issue of abuse or bullying of securities industry analysts, mainly by the companies the analysts are paid to evaluate.

It's the flip side of the analyst scandal that plagued Wall Street in the late 1990s. Then, too often, analysts were willing to publicly proclaim any corporate skunk a sweet-smelling rose. The aim was to get the analyst's firm more investment banking business.

Post reform of that system, we've heard anecdotes about analysts critical or skeptical of the investment value of public companies' securities abused or bullied by those very companies.

How widespread is this problem? The Securities and Exchange Commission staff recently surveyed nine Wall Street firms about this and six thought the issue was of "ongoing concern and provided specific examples." The three other firms essentially said no big deal.

SEC Chairman Christopher Cox is exercised about it. He told Sen. Ron Wyden, D-Ore., in a letter last week, "This is indeed a concern and we will tackle it." Wyden had asked the watchdog agency for its view of the problem.

SEC staff is studying analyst abuse and Cox sent Wyden a memo the staff prepared for Cox. The staff found the same tactics that have surfaced in various news stories and Congressional testimony of the past few years. Retaliation and bullying range from the mild to the serious.

Analysts who have been critical of a company sometimes don't get to ask questions on post-earnings conference calls with corporate management or they are kept from the face-to-face meetings with top officers other analysts enjoy. Those fit the mild category. The tactics are petty and unfair, but the skeptical analysts should still be able to get their jobs done.

More pernicious are alleged attempts by companies to silence a critic by threatening to cut off actual or potential business with the analyst's firms. In other words, if the analyst isn't more positive, the securities firm might get none of the criticized company's banking business.

(The SEC's staff notes in its memo to Cox that independent research may be less susceptible to such threats since they aren't always seeking other types of business from the firms they analyze.)

Also serious is what the SEC staff terms "intimidation and humiliation." Under that heading the staff writes, "Issuers may criticize an analyst' work product on conference calls and in the media."

A few years back one company used a regulatory filing to tell a bearish analyst that the company's management would never agree to meet with him. SEC staff also cited the threat of lawsuits.

Interestingly, SEC staff said issuing companies aren't the only culprits here. Some of the securities firms said institutional investors can apply heat when an analyst says something contrary to their market position in a stock. "In such cases, the institutional customer might withdraw or threaten to withdraw business (e.g. trading commissions) from the firm for a period of time as retaliation for the rating," the SEC staff said.

Venture capital firms have even gotten into the act, threatening to leave a firm out as an underwriter for an initial public offering if the subject area analyst isn't rah-rah about the deal.

Despite all this, a new rule from the SEC isn't the right answer. In the first place, one can envision endless debates between companies and analysts about the facts of each particular case. Was an analyst really singled out for silence when not everyone who wanted to got to ask a question on a conference call?

Companies, at least, would have to pay heed if an SEC or stock exchange rule told them to play fair with analysts or face sanctions. How would you discipline venture capitalists or institutional investors?

Also, as noted by SEC staff, not all securities firms even think this a big deal.

The problem cries out for non-regulatory relief. Already there has been some, in the form of best practices guidelines from concerned industry trade groups that provide specifics on how companies and analysts should treat each other.

Boards of directors have a duty here, too. They simply should not allow their chief executives and other top officers to bully bearish analysts. If they think the analyst is wrong on the facts, those directors and CEOs should say so. But that's all.

If analysts are treated unfairly, they should speak out. The attendant negative publicity from such cases should make companies think twice.

And if Chairman Cox wants to tackle this, he should employ the bully pulpit available to SEC chieftains and denounce the problem, naming names if possible. That might be the fastest way to stop this unwarranted practice.

-- Neal Lipschutz is vice president and managing editor, Dow Jones Newswires.