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Morgan Stanley

  

Morgan Stanley

Morgan Stanley is an investment bank founded in New York on September 5, 1935 from the investment bank of J. P. Morgan & Co because of the separation of commercial and investment banking through the Glass-Steagall Act ([1]).

M&A & divestitures


On February 5, 1997 the company announced a merger with Dean Witter Discover and Company, the spun-off financial services business of Sears Roebuck. The merged company was briefly known as "Morgan Stanley Dean Witter Discover & Co. " until 1998 and then "Morgan Stanley Dean Witter & Co." until late 2001.

Legal proceedings

Misleading financial analysis was disclosed amongst investment banks in the United Kingdom, but Sir Howard Davies, chairman of the UK Financial Services Authority, decided not to intervene. Davies was also an employee of the bank. In criminal activity in the US similar to that alleged in the UK, Morgan Stanley was fined $125m.

On July 12, 2004, Morgan Stanley settled a sex discrimination suit brought by the Equal Employment Opportunity Commission for $54 million.

On January 12, 2005, The New York Stock Exchange imposed a $19 million fine on Morgan Stanley, for regulatory and supervisory lapses.

Quick facts

  • Chairman and CEO: Philip J. Purcell who headed Dean Witter Discover, has been Chairman and CEO since the merger.

    Recent (2005) disputes


    Concerned over lackluster performance, eight former senior Morgan Stanley executives, including S. Parker Gilbert, who had been chairman of Morgan Stanley before the merger, and Robert Scott, who had been CEO, sent a letter to the Board on March 3, 2005 requesting
    immediate replacement of Purcell as CEO. On March 31, they published a full-page advertisement in the Wall Street Journal revealing their position.

    Phil Purcell is known for being the management consultant who advised Sears to
    purchase Dean Witter and then becoming CEO of Dean Witter. At the time of the acquisition, Purcell had no securities experience. After Sears bought Dean Witter, he presided
    over 20 years of decline at Dean Witter, which fell from a strong position in the top ten (by many security industry ratings standards) into the top 25.

    In addition, while Citibank's credit card business swelled from 20 million
    to 120 million cards between 1985 and 2005, the Discover Card over which Dean Witter presided stagnated. The credit card growth that did occur did so at Sears, where 30 million credit cards have been sold.

    The dispute, which the eight former executives claim represents a groundswell within the company,
    concerns Phil Purcell's similar neglect for Morgan Stanley's traditional and most profitable institutionally ingrained business: investment banking.

    Key to the firm's future is Joe Perella, the head of investment banking and former head of acquisitions at CSFB (Credit Suisse First Boston). (Perella joined Bruce Wasserstein to form the former "Wasserella" specialist firm
    dealing mainly in mergers and later sold to Dresdner Bank). Perella, left Wasserella to join Morgan Stanley and now manages the critical investment banking dept at Morgan Stanley. It was announced April 13 that Perella
    was also leaving Morgan Stanley.[1] Perella, M&A mega expert, also very nice person, and head of investment banking, leaves with his deputy. The easy
    going but hard working Perella would never leave but for dire reasons - as e.g. he cant stomach any more the endless Machiavellian intrigues of Purcell.

    The board of directors 'heavily packed' by Purcell with his own loyalists
    appear to continue to solidly back Purcell, as he continues to miscue
    as announcing sale of 'cash cow' Discover cards, furthering attempting to
    drive Morgan Stanley out of business.

    NY Times review March 30 2005 (Registration required)

    NY Times
    review Aprile 13 2004

    Organization


    Morgan Stanley is comprised of four main business units:
  • Institutional Securities
  • Individual Investor Group
  • Investment Management
  • Credit Services

    Diversity

  • Morgan Stanley was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.
  • Family Digest magazine named Morgan Stanley one of the "Best Companies for African Americans" in June 2004
  • Essence magazine named Morgan Stanley as one of the "30 Great Places to Work" in May 2004
  • Asian Enterprise magazine named Morgan Stanley as one of the "Top Companies for Asian Americans" in April 2004
  • Hispanic magazine selected Morgan Stanley as one of the "100 Companies Providing the Most Opportunities to Hispanics" in February 2004

    See also

  • Goldman Sachs
  • Merrill Lynch

    External links

  • Morgan Stanley Homepage
  • Yahoo! - Morgan Stanley Company Profile

    References

  • Hibbard, J. (17 January 2005). Morgan Stanley: No stars—and lots of top tech IPOs. In BusinessWeek, 56 – 58.

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