“First it was the King. Now it is the Queen,” writes Colleen Debaise in today’s Wall Street Journal.

“Investors who say they were burned by bullish Internet-stock calls made by Mary Meeker — once dubbed by Barron’s magazine the Queen of the Net — Wednesday sued the high-profile Internet analyst and her employer, Morgan Stanley.”

“The suits, filed in a New York federal court by investors in Amazon.com Inc. and eBay Inc., follow an arbitration case by a former client who claimed he was misled by a bullish stock call by Merrill Lynch & Co. Internet analyst Henry Blodget, once dubbed King Henry. Last month, Merrill settled that case for $400,000.”

“The cases have been widely watched on Wall Street. Ms. Meeker and Mr. Blodget were perhaps Wall Street’s two most famous Internet analysts, based largely on a series of “buy” recommendations during the tech-stock bull market. But since the Internet bubble burst last year, many tech stocks have been pummeled, and investors have reviled research analysts and the brokerage business for their rosy stock calls and myriad conflicts.”

“Stock regulators, Congress and others are examining the issue, asking Wall Street to justify the way it comes up with research recommendations. Critics say the biggest obstacle to independent research is Wall Street firms that seek investment-banking business from companies their analysts follow and that pay analysts partly based on how much banking business the firms get.”

“That is one of the issues in the most recent case. Amazon and eBay investors accuse Ms. Meeker in their suits of issuing positive recommendations on the companies’ stocks to generate investment-banking business for Morgan Stanley. The suits, which seek class-action status, also contend that Ms. Meeker’s reported 1999 pay package of $15 million was directly linked to her ability to secure investment-banking fees for the firm.”

“A spokesman for Morgan Stanley said the company hadn’t seen either lawsuit, but that it believes the complaints are without merit and will be dismissed. ‘Morgan Stanley research is thorough and objective,’ the company said in the statement. ‘Mary Meeker is one of the most respected analysts on Wall Street. The allegations are unfair, inaccurate and cannot be supported in court.’ Ms. Meeker couldn’t be reached for comment.”

“New York attorney Fred Isquith, who represents the investors, asserts that the suits are the first to spotlight the notion that an individual analyst may have had a personal financial motive to hype a stock.”

“In the past, securities litigation often named analysts as defendants along with the officers of publicly traded companies. But the latest suits have a new twist, in that they focus solely on the analysts and their employers.”