03-26-2006, 07:05 PM
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Administrator
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Join Date: Mar 2006
Posts: 52
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University of Michigan's Consumer Satisfaction Index
Whispernumber points to interesting claims of corruption with the University of Michigan's Consumer Satisfaction Index:
http://www.whispernumber.com/wake_up2_UofM.jsp
Quote:
Aside from the Consumer Sentiment survey, the University of Michigan is involved with a number of other consumer surveys - the second best known is the University of Michigan's Consumer Satisfaction Index. It was 'disclosed' earlier this year that the Director of this University of Michigan survey, Professor Claes Fornell, a well-known and distinguished professor at the University of Michigan, had been front running stock trades prior to the service being released. In a statement, the University admitted that Professor Claes Fornell has been 'purchasing stocks two weeks in advance of the reports being released' (this is better known as 'front running' a highly unethical and oftentimes illegal action, and is similar in nature to the current mutual funds scandal in the news now). It was reported that Fornell had been doing this for 3 years.
We also found out that the University of Michigan has been selling Mr. Fornell's data to investment banks, analysts, and brokerage firms for up to $30,000 a year. The brokerage firms and banks receive the data two weeks prior to it being released to the investing public (and the media). (This practice of selling data to investment banks and other subscribers is carried over to the better-known Consumer Satisfaction survey as well.)
This represents an incredible conflict of interest with equal significance to the front running charge. So essentially, the reports are issued to the media, who then releases them to the public, with the spin that this is 'breaking news' or hot off the presses. This is clearly not the case and proves another example of how the consumer and the individual investor are once again getting the short end of the stick.
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