How do you stop an analysts from downgrading your stock? Just do a few small favors and grease some palms.

That's the finding from a study that reveals about two out of three analysts have received favors from CEOs, CFOs, and other top executives.

More alarmingly, the study found that the more a company's earnings fell below earnings forecasts, the more favors it would bestow on the analysts. And the analysts seemed know which side their bread was buttered on: in return, they would be less likely to downgrade the stock.

The study, by James D. Westphal of the university of michigan and Michael Clement of the University of Texas, also found that retaliation against analysts (like, for example, not taking their calls) was just as effective. Favors included putting analysts in touch with top management of another firm, providing them with career advice, or personal advice, recommending them for another job or helping them gain access to a private club or non-professional organization.

The study was based upon answers to 4500 questionnaires mailed to analysts between 2001 and 2003 and follow-up surveys sent to executives of the companies they cover.

If they study is right, there would be plenty of analysts out there prone to conflicts of interest. And the disturbing part is that the shareholders, who can't afford to bestow favors, get screwed over big time.