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Morgan Stanley suspends coverage of LVMH

U.S. investment bank Morgan Stanley said on Thursday it was immediately suspending its coverage of LVMH after a Paris court ruled that it was guilty of defaming the luxury group.
/ Source: Reuters

U.S. investment bank Morgan Stanley said on Thursday it was immediately suspending its coverage of LVMH after a Paris court ruled that it was guilty of defaming the luxury group.

Morgan Stanley said it was now impossible for it to express its true convictions regarding LVMH and, therefore, the bank was obliged to suspend coverage of the stock until further notice.

"This decision is unprecedented for us and was very difficult to take," said Morgan Stanley Chairman Stephan Newhouse in a statement.

"The intolerable situation created by the court's judgment means it is impossible to continue for now to express our opinions on LVMH," he added.

Morgan Stanley also confirmed it would appeal the January 12 ruling and reiterated its "unwavering support" for the widely respected analyst who wrote the research, Claire Kent.

"Claire Kent has expressed nothing but her convictions in all honesty," said Newhouse.

Paris's commercial court found Morgan Stanley guilty of defaming LMVH in a landmark ruling, which if upheld would change the face of investment research, according to experts.

Following a 14-month legal battle, the court upheld allegations by LVMH that the bank's equity research had been biased against it. The court awarded 30 million euros in compensation and appointed an expert to evaluate the extent of material damages against the company.