“A top health care analyst for UBS resigned under pressure yesterday after bank officials discovered an e-mail message in which he disparaged HealthSouth just months after he had given the stock the highest possible rating,” writes Landon Thomas in today’s Wall Street Journal.

“The stock analyst, Howard G. Capek, sent the message to an institutional investor in September 1999, saying, ‘I would not own a share’ of HealthSouth.”

“The action comes at a difficult time for UBS. Since April, securities regulators have been investigating its research and investment banking departments to determine whether the bank had a role in the fall of HealthSouth, the health care services giant whose top executives have been accused by regulators and prosecutors of engaging in accounting fraud.”

“Benjamin D. Lorello, UBS’s top health care banker; William McGahan, his former deputy, who left the firm for personal reasons; and Mr. Capek are expected to testify before the House Committee on Energy and Commerce in September about UBS’s banking relationship with HealthSouth. Mr. Lorello arranged more than $8 billion worth of investment banking deals with HealthSouth during his time at UBS and previously at Salomon Smith Barney.”

“Mr. Capek was a vocal proponent of HealthSouth and was one of the last analysts to downgrade his coverage from a buy rating when the stock began its plunge in March.”

” ‘Howard enjoys an excellent reputation for integrity and independence,’ said Thomas Fitzpatrick, Mr. Capek’s lawyer. ‘There are numerous e-mails from Mr. Capek that show that he had a high regard for the company and its prospects.’

“UBS officials said Mr. Capek was forced out for having discussed the stock with a client at a time when HealthSouth and UBS were involved in an investment banking deal that barred Mr. Capek from expressing his views on the stock. Because of that relationship, Mr. Capek’s coverage of HealthSouth had been suspended and UBS effectively had no published rating on the stock.”

“This week, while sending out e-mail documents to the House committee, UBS officials came across Mr. Capek’s message. Yesterday, a copy of the message, among other documents, was sent to the committee.”

“A UBS spokesman said yesterday: ‘UBS has strict policies and standards in place that govern our conduct and we will not tolerate breaches of these policies.’ “

“But Mr. Capek’s having made negative comments while publicly supporting HealthSouth is likely to pique the interest of regulators, arbitration lawyers and Congressional investigators.”