For several months, the French legislator and professional organisations have been working to tighten up financial analysis. The finance and banking law firm Crefovi answers the following questions. Is a more restrictive regulation vis-à-vis the people disseminating and publishing financial analysis really necessary? How compatible would these future rules be with international standards?
Should we legislate on the activity of financial analysts?
The tightening of the rules applicable to financial analysts at the international level encourages the French legislator and professional organisations to adopt more restrictive provisions vis-à-vis these people.
The need for supervision is all the stronger since the French luxury group LVMH sued the American bank Morgan Stanley in November 2002 before the Paris commercial court, in payment of Euros100 million in damages.
The world’s leading luxury company invokes the existence of such conflicts of interest, within Morgan Stanley’s financial analysis and investment banking departments, that the analyst responsible for the luxury sector has, according to it, published and disseminated biased and biased research notes on the LVMH value, in order to favour Gucci, a client of Morgan Stanley’s mergers and acquisitions department and a direct competitor of LVMH.
Morgan Stanley, whose financial analyst in question enjoys an excellent reputation, categorically denies these allegations.
Should we legislate on the activity of financial analysts? The answer is given here, in this article published in the journal BanqueMagazine.Read article here