Business Research

Business research is a great tool to use to solve problems and management dilemma within the business. There are times when the business research is not done properly because of unethical behavior of the researcher and a lawsuit may be filed. LVMH sued Morgan Stanley for a research done by their industry analysts that provide false information about the company. LVMH Moet Hennessey Louis Vuitton SA is a very large luxury good company best known for its Louis Vuitton leather products and its Moet & Champagne. Morgan Stanley is an investment bank that supports a lot of clients like Gucci Group NV. In the late 1990s LVHM tried to takeover Gucci NV but because of the advice of Morgan Stanley, Gucci went with Pinault Printemps Redoute SA and they brought all of LVHM stakes in Gucci. Claire Kent, head of Morgan Stanley's luxury goods research, was tasked from 1999 to 2002 to do research on the world's largest luxury goods group which included LVMH. Ms. Kent was rated as one of the top luxury goods industry analyst for the past eight years according to Institutional Investors magazine and was consistently ranked among the best by her peers. "In February 2003, an annual survey of money managers by Institutional Investor magazine ranked Ms. Kent the leader in her field for the ninth consecutive year (Tagliabue 2003)." This was doing the same time the trail was going on.

LVMH filed a lawsuit against Morgan Stanley for the investment bank's research on the world's largest luxury goods group. LVMH alleged that Morgan Stanley's London based luxury goods industry analyst, Claire Kent, provided false information about LVMN in the research report from 1999 to 2002 and there was a conflict of interest. Gucci Group NV was a rival for LVMH and was also one of the companies being researched by Ms. Kent. Ms. Kent lowered LVMH ratings and raised Gucci ratings in her research reports while misrepresenting LVMH's debt levels and the reports are used by investors and other companies to make business decision. LVMH sued Morgan Stanley for 100 million euros in the biasness of the investment bank's equity research, and Morgan Stanley filed a countersuit for 10 million euros in damages and the publication of a final court verdict. The lawsuit continued for a few months before the verdict was made and Morgan Stanley was charged and ordered to pay 30 million euros to LVMH for the research the bank had made to defame LVMH. "The