Despite a massive regulatory settlement a decade ago, stock analysts are still touting shares of companies that kick back lucrative investment banking fees, Wall Street bankers and executives say. They point to the recent announcement by Goldman Sachs, which Monday raised it price target on major investment banking client Twitter (TWTR) to $65 from $46 as proof that these conflicts still exist. 

The upgrade came on the same day Goldman called for a 10% correction in the broader market.

Goldman’s announcement sent shares of Twitter up more than 4% and comes at a time when many analysts and traders are saying Twitter shares are ripe for a fall. As FOX Business was first to report, traders have been complaining about a lack of available “float” or shares in the secondary market so they can start shorting Twitter, and earn trading profits betting that the stock will fall.

Goldman, which was the lead underwriter on Twitter’s Nov. 7 initial public offering,  earned the lion's share of the fees on the deal -- $26 million, compared to just $14 million and $11 million for co-underwriters Morgan Stanley and JPMorgan. So far Goldman is the only top underwriter -- or co manager -- recommending to investors that they buy the stock. 

Deutsche Bank, which had a lower position on the deal, is also recommending the stock with a $50 price target, according to S&P Capital IQ.

And according to Wall Street executives, it was money well spent. Morgan Stanley has a  $33 price target and a sell rating on the stock, while JPMorgan has a $40 price target and rates shares of Twitter a “hold.” Shares of Twitter have traded as high as $74, but have recently hovered around $60.

Santosh Rao, a managing direct and head of research at Greencrest Capital, told FOX Business that the timing of Goldman’s price target raises eyebrows. “On first blush it looks like a conflict of interest,” he said, adding “they are thinking, ‘We did the lead and want to keep it (share price) up there.’" 

Rao has a sell rating with a $28 price target.

Rao said that Morgan Stanley, another top underwriter on the deal, “knows the same things as Goldman and downgraded the stock.” Rao said another negative for shares of Twitter is that 400 million shares of the stock will hit the market when the so-called lock-up periods end in May.

Twitter will make its first earnings announcement as a public company on February 5.  Twitter is still unprofitable and isn’t expected to turn one until at least late 2014, a big reason why so many analysts are bearish on the stock.

David Wells, a Goldman spokesman, declined to comment on the matter. He also declined to say whether or not Goldman violated regulatory rules promulgated after a lengthy investigation by the Securities and Exchange Commission and the New York State Attorney General’s office over conflicts of interest involving Wall Street research.

The probe led to a massive settlement with Wall Street’s top firms including Goldman that produced evidence that major Wall Street underwriters routinely gave positive ratings on companies that were investment banking clients.

Many of those ratings differed from the private opinions of the analysts themselves, as was revealed in emails uncovered during the lengthy probe.

In the wake of the settlement, announced in 2003, firms were forced to erect barriers  between their investment banking departments and research units to prevent bankers from influencing analyst stock recommendations.

But many bankers tell FOX Business those barriers can be easily evaded. Press officials from the SEC and the New York AG’s office had no immediate comment.

Charles Gasparino joined FOX Business Network (FBN) in February 2010 as Senior Correspondent.

Follow Julie VerHage on Twitter @julieverhage.