Stock market conspiracy theorists, prepare to have your thought balloons burst.

For as long as I've been writing for the Fool (and even more frequently since I began covering the ratings of Wall Street's analysts), I've heard a theory voiced over and over: The stock market is rigged. Big-name investment bankers like Citigroup (NYSE: C), JPMorgan Chase (NYSE: JPM), and Bank of America (NYSE: BAC) manipulate stock prices up and down to fatten their own purposes, and one of their tools of choice is the analyst upgrade (and analogous downgrade.) Problem is … it's just not true.

In its simplest form, the theory goes like this: Say Citi comes out with an upgrade to "buy" on the stock of Superior Urban Consolidated Kinetic Rollerskates (Ticker: SUCKR). The reason Citi upgraded isn't that it thinks SUCKR is really a buy, but because Citi's playing you for a fool (small "f"). Citi wants you to buy the stock -- which it secretly owns -- so Citi can unload it for a fat profit. Conversely, if B of A tells you to sell Gondwanaland Industrial Metals and Mining Empire (Ticker: GIMME), this isn't because Bank of America hates GIMME, but because it loves the stock and hopes to scare you into selling on the cheap.

Up is down, and down is accordingly up
According to the conspiracy theorists, what you should really do is sell when Wall Street says "buy," and buy when it says "sell." Savvy? There's just one problem with this theory: Far from publicizing their market-moving news, across Wall Street, bankers are pulling down the shades, dimming the lights, and going dark.

Earlier this week, we learned that Barclays (NYSE: BCS), Morgan Stanley (NYSE: MS), and Bank of America have all been engaged in a lawsuit against ratings reporter theflyonhewall.com. As part of an effort to clamp down on ratings leaks, the banks tried to silence the website and prevent it from reporting on ratings changes the bankers provide their clients. But on Monday, a federal appeals court rejected the banks' claims, ruling that reporting "hot news" on analyst ratings didn't constitute a misappropriation of the bankers' intellectual property.

The banks are now considering whether to appeal. Whatever they decide, at least one mystery has been resolved: There's a reason so many of the biggest banks, which up until about a year ago routinely provided ratings for independent review, have suddenly gone dark and stopped publicizing their stock ratings.

It's not because they want to influence which stocks you buy and sell. In fact, it's the opposite.

Fool contributor Rich Smith does not own, or short, any stock named above. The Motley Fool, however, owns shares of JPMorgan Chase, and The Fool owns shares of and has opened a short position on Bank of America.

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