Morgan Stanley to pull ads from 'negative' newspapers

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The Independent Online

Morgan Stanley, facing an unprecedented barrage of criticism, has told newspapers that its advertising decisions could be affected by overly negative coverage on their pages.

Morgan Stanley, facing an unprecedented barrage of criticism, has told newspapers that its advertising decisions could be affected by overly negative coverage on their pages.

The beleaguered investment bank has added a new clause to its advertising contract that asks publications notify its advertising agency of any planned "objectionable editorial coverage", so that ads can be removed or placed in a different part of the newspaper or magazine.

The move comes as Morgan Stanley's chief executive, Philip Purcell, is under pressure from a group of former senior executives to resign. The bank has also been ordered to pay $1.45bn (£790m) to Ron Perelman, an American billionaire investor who accused the bank of defrauding him over a business deal.

"In the event that objectionable editorial coverage is planned, [Morgan Stanley's ad] agency must be notified as a last-minute change may be necessary," the new advertising contract says.

"If an issue arises after-hours or a call cannot be made, immediately cancel all Morgan Stanley ads for a minimum of 48 hours."

The bank said it had not yet exercised its rights under the new clause. A spokesperson for the bank, which spends many thousands of dollars a year on advertising, said the change of clause was not an attempt to gag the media. "We obviously have no say" over editorial decisions, the spokeswoman said.

The New York Times confirmed it had received notice of the change. Neither Dow Jones, which publishes The Wall Street Journal, nor the Financial Times would comment.

It is common for large companies to have similar clauses in advertising contracts. The stipulation allows sectors such as airlines to pull or delay adverts from running on the day of a major aeroplane crash.

Morgan Stanley, which has been used to positive coverage as one of Wall Street's most successful investment banks, may have not seen the need for such protection until now. It emphasised it was not planning to boycott publications altogether, but only to move an advert from appearing next to a negative article, or to delay it by a few days.

General Motors stopped advertising in The Los Angeles Times last month on the basis that a series of negative articles about the car giant were erroneous.

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