Morgan Stanley halts LVMH research

Morgan Stanley has suspended research coverage of luxury goods group LVMH because the investment bank felt "unable to express honestly held beliefs".

Morgan Stanley was ordered to pay €30m in "moral damages" earlier this month to LVMH after a court ruled that the US investment bank had published "erroneous and biased" research into the luxury goods retailer.

The luxury firm had argued that the research had favoured Gucci. In 2000, when the research was published, LVMH was seeking to buy Gucci but its attempts were frustrated by rival PPR. Morgan Stanley was adviser to Gucci.

Morgan Stanley's international chairman, Stephan Newhouse, said last night : "The untenable situation created by the court judgment makes it impossible for us to continue to express our opinions on LVMH at this time."

Morgan Stanley is currently appealing against the ruling.