“Ten Wall Street securities firms are bracing for a burst of e-mail messages and other documents suggesting that their stock research was tainted by investment-banking goals, as regulators put the finishing touches on the long-awaited $1.4 billion global research settlement, which is expected to be announced early next week,” write Randall Smith in today’s Wall Street Journal.

“The settlement will highlight the activities of some firms that have thus far avoided significant public attention in the investigation that focused on analysts’ roles in keeping air in the stock-market bubble of the late 1990s and into 2000.”

“For instance, Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. will see a batch of their own internal documents aired in separate sets of charges of research conflicts focusing mainly on technology and telecommunications stocks, according to people familiar with the settlement.”

“As part of the settlement, the firms will neither admit nor deny wrongdoing.”

“After an extensive midweek presentation to Securities and Exchange Commission commissioners, regulators led by SEC enforcement chief Stephen Cutler and New York State Attorney General Eliot Spitzer have been briefing government officials, including staff for members of Congress. Senate Banking Committee Chairman Richard Shelby, an Alabama Republican, plans a hearing on the pact as early as next month.”

“The pact’s firm-by-firm allegations will include e-mails from Goldman telecom-sector analysts James Golob and Frank Governali, in which they candidly discuss how investment-banking considerations influenced how many telecom stocks they were recommending in mid-2000 even as the stocks’ prices were plummeting.”

” ‘Investment banking considerations have prevented me from making a change,’ Mr. Governali wrote in discussing the firms’ ratings on AT&T Corp., a Goldman client, as well as the former WorldCom Inc., now MCI.”

“Even Morgan Stanley, which escaped the worst of the regulatory allegations borne by former star telecom analyst Jack Grubman of Citigroup Inc. and former Internet analyst Henry Bodget of Merrill Lynch & Co., comes in for criticism for allowing some bullish research reports to sit for as long as six months without an update, according to one person familiar with the pact. The findings on Lehman will focus on four or five individuals, including both analysts and managers.”