Series 87 case studies
Series 87 · Put your knowledge to work in context.
The Series 87 - Research Analyst Qualification Examination - is one of FINRA's qualification exams for securities professionals whose work involves research. FINRA describes itself as a not-for-profit, self-regulatory organization with an 85-year history that pursues a mission of promoting investor protection and ensuring market integrity, and it administers its qualification exams through its Registration, Exams & CE section. The Series 87 case studies are 5 cases and about 3,787 words.
1The $58 Target That Requires a Contract Nobody Will Confirm
Cedar Point Securities is a 60-person broker-dealer. Analyst Elena Ruiz is initiating coverage on Kellerman Fabrication (KELM, 41.10) with a Buy and a 58 price target.
781 words, about 4 min2The Bookrunner, the Trust Shares, and the Downgrade IB Wants Delayed
Marcus Hale covers medical technology at a 400-rep firm. His spouse controls a trust holding 1,200 shares of Verity Health Systems, one of Marcus's covered names (about 72,000).
727 words, about 4 min3The Livestream Guarantee and the Missing Script
Priya Nandakumar covers software for Halstead & Company, a FINRA member that makes markets in roughly 340 names and co-managed an $180 million follow-on offering for Lumenix Systems eight months ago. On a Tuesday she appears on a live, streamed investing program with about 40,000 viewers and says Lumenix "will double in 18 months" and that "at these levels there is no way you lose money." She does not mention Halstead's co-manager role or its market making.
730 words, about 4 min4Five Findings and a Part-Time CCO
At Ridgeline Securities, director of research Owen is also the designated supervisory principal for the 11-person research department and sets analysts' bonuses. In a two-day internal sweep the CCO documents five items: (1) 3 of 22 reports published last quarter have no evidence of principal review; (2) Owen approved a report on a company for which Ridgeline was a bookrunner four business days after the offering priced; (3) no scripts or notes exist for any of the 14 public appearances analysts made this year; (4) an analyst's bonus memo says bonuses are "weighted 40% to investment banking revenue"; and (5) a junior analyst emailed a draft with a $95 target to 25 institutional clients two days before approval.
838 words, about 4 min5We Keep the PDF, So What's the Problem?
Meridian Research Partners stores final research reports as PDFs on a shared drive and deletes drafts, models, and analyst notes after 90 days "to keep the drive lean." Public appearance notes are kept only if the analyst remembers to save them. Responding to a FINRA request, Meridian produces 22 final reports but cannot produce the spreadsheet behind a $72 price target, the two prior drafts of a downgrade note, the panel notes from a March industry conference, or any Regulation AC certifications.
711 words, about 4 min