On a brighter note, investment banking revenues were up 46 percent in the quarter, to $187 million, reflecting a doubling of underwriting revenues.

Mr. Lydon and Ms. McGrath had sought only a share of the underwriting revenues.

For instance, Morgan cannot derive more than 10 percent of its underwriting revenues from offering equities and certain debt securities; the rest must come from underwriting Treasury debt.

PCC gets on air recognition and funding for a broadcast internship program while APM controls the station and all the pledges, grants, and corporate underwriting revenues.

The firm said its underwriting revenue declined 12 percent, to $479 million, a surprisingly small drop in a slumbering market for new stocks.

Last year's rate of gain trailed only an 87.2 percent increase in underwriting revenue and a 30.4 percent gain in research-related revenues.

"Merger, acquisition and restructuring activity continued at a high level and underwriting revenues, particularly in equity and high-yield securities, were strong," they said.

There will be no more encouraging nudges from investment bankers to produce research intended to generate big underwriting revenues for the firm.

Merrill Lynch said that its earnings fell primarily as the result of a steep drop in underwriting revenue.

J. P. Morgan & Company, which said profit in the quarter plunged 35.3 percent on lower trading and underwriting revenues, suffered the heaviest damage.