Word on the Street Scandal-ridden investment houses are leaving gaps in the financial market, and savvy entrepreneurs are jumping at the chance to fill them. How will this trend shape the new face of Wall Street?

Waheed Hassan hardly reminds anyone of Gordon Gekko. A31-year-old stock analyst with a high, boyish voice, Hassan foundedhis Potomac Falls, Virginia-based independent stock research firmin May 2003, with two other partners. Hassan's firm, Investology,remains tiny, with only one full-time employee. Unlike analysts atbig investment banking firms, Hassan doesn't appear on CNBC insharp suits, give frequent quotes to The Wall Street Journalor expense fancy lunches. No, Investology toils in relativeobscurity, focusing on stocks of companies most Americans havenever heard of. "We do research on small capitalizationstocks," says Hassan. "Merrill Lynch, Morgan Stanley-theydon't cover small caps [today], so it's an opportunity forus."

These days, there are more and more Waheed Hassans, and fewerand fewer Gordon Gekkos. Over the past three years, as IT has madeit easier for entrepreneurs to sell stock research, and as scandalsinvolving Wall Street brokerages have sullied the image of thelargest firms, the market for independent stock research andanalysis has opened up. And savvy entrepreneurs like Hassan arestepping into the breach, taking business from the financialgiants. Indeed, despite its hand-to-mouth existence,Investology's independent research has already won the companya relationship with one of the bigger U.S. pension funds.

The Scandal Effect