The battle between the world's leading luxury goods group and one of Wall Street's most powerful investment banks intensified yesterday as Morgan Stanley launched a $11.9m (€10m) countersuit against Moet-Hennessy Louis Vuitton (LVMH).
LVMH alleged the bank's equity research has been systematically biased against it.
LVMH has so far produced 41 pieces of evidence that it claims prove bias in the work of Ms Claire Kent, Morgan Stanley's luxury goods analyst.
These included a CD-Rom containing 1,900 pages of her research going back to 1999.
Mr Stephan Newhouse, chairman of Morgan Stanley International, said: "These proceedings are an attempt to damage the reputation of Morgan Stanley and to undermine the reputation of Claire Kent."
The bank said LVMH had taken Ms Kent's words out of context, often truncating and manipulating them. It said all its comments about LVMH were justified.
"For research analysts to engage in self-censorship, by focusing on a company's strengths while ignoring its weaknesses would undermine the whole purpose of their research."
Investment banks are anxious to limit exposure to civil suits following their $1.4 billion settlement with Mr Eliot Spitzer, New York state's attorney-general.
LVMH is seeking €100 million damages from Morgan Stanley, which was fined $50 million under the terms of the settlement and required to pay a further $75 million towards the funding of independent equity research.
The French group claimed Ms Kent systematically denigrated it in order to make Gucci, a longstanding Morgan Stanley client, appear relatively attractive.
Morgan Stanley rejected accusations that it failed to disclose a conflict of interest.
The court has asked both sides to present conclusions on September 15th
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