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Analyst Resigns After UBS Says He Broke Rule

Markets

July 03, 2003|From Bloomberg News

UBS Securities analyst Howard Capek, who kept a "buy" rating on shares of HealthSouth Corp. after the hospital operator was accused of accounting fraud, resigned Wednesday after the brokerage firm said he broke a rule in 1999 banning employees from discussing the stock.

Capek had told an institutional investor in an e-mail that he "would not own a share" of HealthSouth after UBS started investment banking work for the company from June to September 1999, brokerage spokesman Mark Arena said.

Capek's comments violated UBS restrictions on talking about banking clients and were uncovered as UBS gathered evidence for regulators who are probing HealthSouth, Arena said.

Regulators in March charged HealthSouth with inflating its profit by $2.5 billion since 1997. A House committee now is looking into HealthSouth's relationship with UBS, which has performed extensive securities underwriting work for the firm.

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