Here's a story on the ethics of a hot Wall Street analyst. An intriguing sidelight is whether banking biggie Morgan Guaranty Trust profited on inside information on Charter Co., one of the year's hottest stocks. In effect, it's a story about insiders that could make outsiders mad as hell.

First the analyst. Question: Is it cricket for an analyst to take a fair-sized position in a security, wait at least 60 days and then aggressively recommend it to the brokerage firm's clients without informing them of his ownership?

About two months ago, it was reported that a hot picker of oil stocks, energy analyst David Snow of A. G. Becker Inc., did just that. He bought an undisclosed amount of warrants (some under $2) of the Charter Co., a diversified petroleum firm on the Big Board, before recommending the stock in early April at about $10 a share. He subsequently fattened his holdings to about 85,000 warrants, which have rocketed this year from a low of 1 3/8 to a high of 44. In the same period, the stock shot up from 5 3/8 to 44 7/8.

Reports of Snow's actions have sparked investigations by the Securities and Exchange Commission, the New York Stock Exchange and the Financial Analysts Federation which, with some 15,000 members, is the nation's biggest organization of securities analysts.

Becker previously insisted that Snow -- who already has been interrogated by the SEC -- acted entirely in compliance with Becker's policy. This policy permits an analyst to recommend a stock after he or she has bought it provided the purchase precedes the buy recommendation by 60 days or more. And there's no requirement to inform the clients of any stock position.

However, Ted Lilley, president of the federation, while declining to comment directly on the Snow inquiry, indicated that the analyst's actions may have violated the ethics of his profession. "Telling your firm you own a stock is not enough," he said. "You've got an obligation to tell your clients, too."

Lilley pointed out that the federation's code of ethics clearly states that, if an analyst decides to make a recommendation as to the purchase or sale of a security, he or she shall give his customers, clients and employers adequate opportunity to act on such a recommendation before he acts on his own behalf. And there's no precise number of days or hours in this regard, Lilley said.

A Big Board source said he thinks the situation smells. "Snow should have known better, but I blame Becker more for having a shoddy policy that permits such questionable purchases," he said.

Smelly situation or not, Snow himself will come up smelling like a rose from his purchases. The scuttlebutt on Wall Street is that he may have bought as many as 25,000 to 35,000 warrants before his recommendation, and at that time, the warrants were trading about $5. He also reportedly since has sold about 40,000 warrants and holds on the full 85,000-warrant position a spectacular profit -- both from realized and unrealized gains -- of roughly $2 million.

Interestingly, some investigatroy digging into the Snow affair could lead to the doorsteps of Morgan Guaranty Trust. There are solid reports that an institutional salesman at Becker -- which services the Morgan account -- acted virtually as a liaison between the bank and Charter. The salesman was in constant touch with Charter, on some occasions several times a day, and reportedly fed his findings immediately to Morgan, which is know to have had a major position in Charter's shares.

Now that may not seem unusual. You might say, in fact, that the salesman merely was doing his job. In this case, though, those repeated contacts between the two could have far more meaningful implications.

To understand this, one has to have a full grasp of the Charter situation. Its big appeal is its prospective purchase of a Grand Bahamas refinery (with rich profit prospects) that was once 65 percent owned by Carey Energy Co. Last May 15, Charter bought Carey Energy -- but its acquisition of the refinery is in doubt because a Venezuelan company is also seeking to buy it. Keeping up to the minute on Charter's sensitive negotiations to acquire the refinery is imperative, especially in view of the competitive effort, because any strong indication that Charter might lose out on the refinery would absolutely clobber its shares.

And that brings us back to Morgan. Were the Becker salesman's findings relevant? Did Morgan receive the information ahead of other Becker clients? Did Morgan act on the salesman's revelations? And was any inside information dispensed? I must confess I don't know the answers, but I have heard from an institutional source close to Becker that some people inside the brokerage concern are worried about the situation. I couldn't determine whether the SEC was aware of the Morgan connection.

At the suggestion of Becker president Jack Wing, I rang up Randy Harris, the firm's general counsel and compliance chief. It was a case of five wasted phone calls; Harris wouldn't respond to any of them. That led me to two obvious conclusions, one or both of which could be correct: Harris doesn't think his president's advice is worth taking or he's deeply worried about the Charter situation. When someone once said, "God protect us from our lawyers," it may be that he had Harris in mind.

Morgan's only comment was its acknowledgement that it had a big position in Charter's shares, well over 100,000 shares. There was no clarification whether all or part of that position is still intact.

Park L. Beeler, Charter's communications vice president, confirmed that he had been contacted by the SEC on Snow's relationship with the company. He said he told the SEC that Snow -- who was lucky enough to acquire part of his Charter position before the company announced buying an interest in Carey Energy in late March -- wasn't treated any differently from any other analyst. Beeler also said the same thing when I asked him about Becker's institutional salesman and Morgan.

The windup of all of this is anybody's guess. Smarter minds then mine will figure that one out -- although it's hardly a secret that a number of Wall Streeters had the Charter story very early, before the rest of the investment public. Probably the most disturbing assessment of the Morgan-Snow revelations is the reaction of one money manager.

"You're crazy if you waste a column on this," he told me. "Snow was right on the stock; he made a lot of money for his clients, and I don't see anything wrong about buying a stock first and then recommending it. It's done all the time. And since when isn't Morgan among the very first to get the best information? Grow up, will ya?"