Suspending judgement

19 October 2004

Andrew Fowler and John Kershaw have been suspended after a note said the UK retailer had helpfully pointed out their numbers were high. This looks bizarre. If it has to do with the possibility they were selectively briefed, it isn t clear why they should be suspended.

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Merrill Lynch's European retailing analysts, Andrew Fowler and John Kershaw, have been placed on paid administrative leave. Merrill said this was pending the completion of an internal review of recent issues pertaining to their coverage. A person close to the bank said that this was a normal proceedure that did not imply any wrongdoing.

Merrill Lynch published a note earlier this month which claimed that J Sainsbury had pointed out that its forecasts were high. The UK retailer denied that it had selectively briefed the analysts and said it was disappointed by the way the bank had reported a conversation. Sainsbury then published a clarification, which warned that profits in the first half of the year were going to be between £125m and £135m, lower than the market had been expecting.

The Financial Services Authority opened an investigation, reportedly over whether there had been any selective disclosure.

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