Analysts suspended over Sainsbury’s downgrade
FSA investigation in briefing continues
Investment bank Merrill Lynch has suspended two of its food retail analysts over a research note on Sainsbury’s which is being investigated by the Financial Services Authority.
The analysts, Andrew Fowler and John Kershaw have been put on paid administrative leave as the bank conducts an internal review of “recent issues pertaining to their coverage”.
Earlier this month the two downgraded their first-half profit forecast for Sainsbury’s in a briefing note which said the supermarket had “helpfully pointed out” that a previous forecast was too high.
The statement raised concerns that Sainsbury’s had made information available selectively, which would be in breach of City rules. The FSA launched an investigation into the matter, which is continuing.
Merrill said “We take these steps to maintain the highest standards of professionalism in our research operations”.
Sainsbury’s has said that its head of investor relations, Linda Ashton, had only drawn the analysts’ attention to information it had already released to the market.
