RJH writes...

The Financial Services Authority (FSA) announcement that they will investigate the iSoft share price gyrations of 6 April is welcome.

At least Morgan Stanley ought to have little to worry about. Their holdings of iSoft equity changed little between end-March and 7 April, the period in question. The firm, which enjoys an extensive investment banking relationship with Accenture (the company whose 29 March profit warning in part prominently blamed iSoft), has consistently held between 4% and 8% of iSoft's equity since February. The following timeline illustrates:

6 Feb: 4.38% of the outstanding shares held
7 Feb: 6.4% of the outstanding shares held
10 Feb: 6.17% of the outstanding shares held
28 Feb: 5.94% of the outstanding shares held
8 March: 4.8% of the outstanding shares held
13 March: 3.99% of the outstanding shares held
13 March: 5.47% of the outstanding shares held

24 March: 0% of the outstanding shares held
29 March: Accenture blame iSoft for profit warning, iSoft shares fall 12%
31 March: 5.9% of the outstanding shares held

31 March: 7.93% of the outstanding shares held
6 April: iSoft shares fall 40% on an intraday basis, closing down 16%
7 April: 6.87% of the outstanding shares held

The Morgan Stanley sell-out of 24 March looks a bit odd but readers may be certain there is a perfectly innocent explanation - brilliant foresight, for example. The scribe is at an utter loss to provide an alternative to this, but he is a simple chap.

Anyway, at least there is little question Morgan Stanley should be very low on the FSA scrutiny list for 6 April. After all, with circa 7% of the equity and nursing hefty paper losses, they must be as keen as anyone to get to the bottom of these curious dealings.

Then again, maybe not. Good luck FSA.

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