“In its settlement agreement with Eliot L. Spitzer, the New York attorney general, Merrill Lynch has clearly won a fine deal for itself. But it remains to be seen whether a result will be as big a victory for investors looking to Merrill’s research analysts for straight talk on stocks,” writes Gretchen Morgenson in today’s New York Times.

“It is the we-first culture of Wall Street that created the deep and troubling conflicts among research analysts in the first place, conflicts that contributed to billions in investor losses during the turn-of-the-century stock market mania. And cultures as enduring as Wall Street’s are rarely overhauled with a single stroke.:

“To be sure, the settlement is by no means the last battle that Merrill will have to fight over how disturbingly symbiotic the relationship between its research analysts and investment bankers had grown in the late 1990’s. The firm remains vulnerable to numerous and potentially costly lawsuits from individuals seeking to recover losses they incurred buying stocks based on Merrill’s research, recommendations the firm held out as independent of any biases.”

“Still, the deal holds much allure for Merrill, the nation’s largest brokerage firm. First, the $100 million penalty is hardly onerous to Merrill. Indeed, according to its most recent annual financial report, $100 million is less than one-third of what the firm paid for office supplies and postage last year. And Merrill’s agreement to separate analyst compensation from investment banking fees reaped from stock and bond offerings and to create a new committee to oversee research recommendations will allow the firm to appear to be superior to its Wall Street brethren that continue to do business the old-fashioned way.”

“Perhaps most important, Merrill’s executives will no longer need to sweat under Mr. Spitzer’s white-hot spotlight, switched on in early April with the release of internal e-mail messages that appeared to show the firm’s Internet analysts deriding companies in private while urging investors to buy them publicly. Now, as Mr. Spitzer has confirmed, that spotlight will shift to other Wall Street firms.”

“Merrill Lynch was quick to state that its settlement with Mr. Spitzer ‘represents neither evidence nor admission of wrongdoing or liability.’ But the firm apologized to its clients “for the inappropriate communications brought to light” by the investigation and said that it regretted that on certain occasions, some Internet analysts at the firm expressed views that ‘may have appeared inconsistent with Merrill Lynch’s published recommendations.’ “