What happened during the Morgan Stanley scandal?
Morgan Stanley’s top Internet analyst, Mary Meeker, is suspected of having kept ratings high for companies she helped bring public. Meeker assisted Morgan Stanley in deciding which companies’ IPOs it would underwrite. Her research had a history of being reliable and exclusive (she only covered companies with strong fundamentals); however, as Internet stock values began to fall, her ratings stayed incongruously high when compared to the actual value of the stocks. The firm recently settled investigations by the SEC, and is now facing a suit by LVMH, a luxury fashion conglomerate. LVMH claims that Morgan Stanley published biased research in favor of Gucci, its competitor, out of a conflict of interest.
