Over Analyzed

LVMH

LVMH scored a major victory in January, 2004 in it's long smoldering war with Gucci Group when a French court declared that Morgan Stanley advises Gucci on investment matters, the bank was guilty o9f gross misconduct and "moral prejudice" by allowing analyst Claire Kent to present a critical report on LVMH. "It is a very good decision, because the court has decided to make very clear the separation between financial analysis and investment banking," asserted Pierre Godé, LVMH'S legal counsel and advisor to LVMH chairman Bernard Arnault. Not only did the court order Morgan Stanley to pay $38.4 million in damages but it also appointed a chartered accountant to calculate additional material damages. Morgan Stanley, which contends that LVMH's case could be used by businesses to intimidate financial analysts, maintains it will appeal the ruling and continues to support Kent.