From TheStreet.com: Merrill Lynch Fires Top Retail Analyst By Rebecca Byrne Staff Reporter 08/21/2002 03:15 PM EDT Merrill Lynch (MER:NYSE - news - commentary - research - analysis) fired top retail analyst Peter Caruso Tuesday night because he violated the firm's research policy, according to a spokeswoman. Merrill said Caruso, who followed 20 stocks, violated the company's policy "regarding the disclosure of an earnings estimate change." Caruso had been ranked No. 1 among retail analysts by Institutional Investor for the past five years. Spokeswoman Melanie Begelman refused to comment on speculation that the analyst had been let go because he warned select clients about his imminent downgrade of Home Depot (HD:NYSE - news - commentary - research - analysis). Shares of Home Depot fell about 17% in the days before the downgrade. When Caruso cut his recommendation on July 12 to neutral from strong buy, the stock shed another 7.4%. It's about damn time! We have long suspected that major houses took big positions ahead of market moving analyst announcements, and Jim Cramer has confirmed in nauseating detail the process by which big commish generators are spoon-fed such info before it is publicly announced. Of course, Cramer doesn't see anything wrong with the practice. He thinks it is a legitimate perk of being a big hitter, kind of like getting Yankees' tickets. Under current law, this practice of front-running analysts is not deemed insider trading, since it is third-party information. The brokers could argue that it represents fraud on them, kind of like the Wall Street Journal case a few years back, but don't hold your breath.