A federal appeals court in New York has put on hold a ban on the financial news service Theflyonthewall.com Inc from quickly reporting hot news' about analyst research from three Wall Street banks.

The ruling by the Second Circuit Court of Appeals is a defeat for Bank of America Corp's Merrill Lynch unit, Barclays Plc and Morgan Stanley, which had won an injunction in March.

Theflyonthewall.com had argued the injunction cost it subscribers and threatened its survival.

The case is Theflyonthewall.com Inc v. Barclays Capital Inc et al, U.S. Second Circuit Court of Appeals, No. 10-1372.

(Reporting by Jonathan Stempel, editing by Dave Zimmerman)