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It is admittedly not a new home movie of Pamela Anderson Lee, but an amateur video is being eagerly emailed around in the brokerage business. In it a Bear Stearns analyst is shown promoting an upcoming initial public offering, and that act briefly caused the IPO to be postponed.

On May 2nd brokerage firm Bear Stearns emailed some large investors a video about an upcoming offering of iPayment’s shares. Bear Stearns analyst James Kissane apparently appears in the video mouthing a few nice things about the company that Bear Stearns was underwriting. And that, some allege, runs contrary to the recent settlement in the brokerage industry that separates equity research from investment banking.

While it was a silly thing for the Bear Stearns analyst to do (and the offering came out on Monday anyway), the IPO should not have been delayed. Here is why:

First, the April 28th brokerage settlement separating equity research from investment banking wasn’t in effect when the video was sent to investors. The settlement, as awry as it is, doesn’t take effect until 60 days after it is entered into court files. And that hasn’t happened yet, so there is no reason to haul Bear Stearns up over Kissane’s inconsequential actions.

Some, of course, might suggest that it is sophistry to say that Bear Stearns can get off merely because it beat the deadlines imposed in the April 28th agreement. Fair enough, but we have to be very careful when we start punishing companies for laws that are not yet on the books. That is a dangerous precedent.

And from a more practical standpoint, the Kissane video was emailed on May 2nd, four days after the brokerage settlement was in place. While electronic communications speed up many things, it is highly unlikely that the video was put together in the intervening period just to thumb a nose at regulators. More likely is that the iPayment video was filmed days or weeks earlier, well before anyone knew precisely when or what shape the brokerage settlement would take.

Second, analysts, like the rest of us, know the list of upcoming IPOs from their own firms. It is far from secret. So for Kissane to make comments about an upcoming Bear Stearns IPO should not be, in itself, a hanging offense.

So if it is okay for Kissane to comment on an upcoming IPO, then let’s consider the words he apparently used.

He said, in opening, that it was his “pleasure” to introduce iPayment’s management. I supposed he could have said he was “mad as hell” to be opening for iPayment, but that would have been silly. So let’s strike “please” as being an opening pleasantry, not exactly the sort of thing that Morgan Stanley analyst Mary Meeker used to say about investment banking clients – but oh wait, she was never accused of anything by New York Attorney General Elliot Spitzer.

Nevertheless, let’s throw “pleasure” out and deal, instead, with the more promotional verbiage that reports say followed later. The analyst said, “I think iPayment represents a great way for investors to play a proven winning strategy in the merchant processing space focused on small businesses, which I just think is a tremendous growth opportunity.”

At face value, the words seem damning: “great way … proven winning strategy … tremendous growth opportunity”. Again, however, let’s put it in context. This is one sentence in a longer video; singled out in this way those thirty-three words are given far more prominence than they deserve. They are platitudes, and as a line in a longer video they are more or less meaningless.

What would critics like Elliot Spitzer have had Kissane say, pre-settlement? Perhaps the analyst should have said, “I think iPayment represents a lousy investment in the proven money-losing merchant-processing market, which is, after all, shrinking faster than my own equity analyst ranks.”

Would that have been better? Or perhaps something utterly innocuous, like, “This company is called iPayment, spelled ‘i’, ‘P’, ‘a’, ‘y’, ‘m’, ‘e’, ‘n’, ‘t’. Thanks – have a nice day everyone. And yes, that is a small ‘i’ at the beginning.”

Admittedly, Bear Stearns and analyst Kissane should have exercised more care – it was dumb to give a flush-with-success Elliott Spitzer any more ammunition. And yes, Bear Stearns hasn’t shown much political savvy, what with this latest incident, plus a prior one where Bear Stearns’ executives downplayed the significance of the brokerage settlement.

But these comments on iPayment were inoffensive and pre-settlement. And most investors, to the extent they watched the video at all, likely ignored Kissane’s brief words.

Nevertheless, politicians and lawmakers are twittering away, telling brokerage firms how to speak, how to act, and when to do either. But investors want none of this rough justice. Instead, they are voting with their money: the delayed iPayment IPO opened on Monday of this week, and it traded up as much 34%. Not bad for “tainted” equity research.