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Tuesday, 26 November, 2002, 06:41 GMT
LVMH sues Morgan Stanley
Morgan Stanley logo
Investment bank Morgan Stanley is being sued by the world's leading luxury retailer LVMH for alleged unfair research favouring rival retailer Gucci.

The 100m euros (64m; $100m) suit alleges Morgan Stanley's research on LVMH was tainted because of the bank's relationship with Gucci.

The legal action is the latest against an investment bank claiming conflicts of interest.

"Morgan Stanley categorically rejects LVMH's claim and stands by the integrity of its research," the bank said in a statement.

LVMH is thought to have filed the action in the Paris Commercial Court earlier this month.

"LVMH confirms it has filed a suit against Morgan Stanley," a spokesman said.

Stock tipping

This latest claim over financial market research comes as the US stock market regulator, the Securities and Exchange Commission, and state regulators are in talks with investment banks over fines relating to their equity research.

The regulators have found evidence that analysts prepared misleading reports about clients, and potential clients, to win more business from them.

Morgan Stanley was caught up in a separate controversy last week after it advised investors to take their money and "run the other way" from companies that are highly unionised industries.

The bank is an adviser to Gucci and was one of its underwriter when it floated on the stock market in 1995.

The case would be the latest twist in a long-running personal battle between Bernard Arnault of LVMH and the head of Gucci, Domenico De Sole.

Mr Arnault tried unsuccessfully to take over Gucci in the late 1990s in what was described as the "handbag war".


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