UBS PaineWebber's HealthSouth Research Analysts Resigns Amid Analyst Conflict Probe

UBS analyst Howard Capek has resigned on "mutually agreeable terms" amid a congressional probe, SEC and Justice Department inquiries of the ties between UBS and HealthSouth Corp.

In one email dated September 10, 1999, Capek told an institutional investor that he "wouldn't own a share" of HealthSouth stock, even though he had initiated research coverage of the stock in May, 1999 with a "Strong Buy" and that rating continued until August, 2002 (only to downgrade to "Buy" despite the stock's plunge of 60% from the 52 week high and the company's issuing a severe profit warning).

Of course, during this time PaineWebber reaped substantial revenue for its investment banking business.

Source: Wall Street Journal, July 3, 2003