Morgan Stanley
Morgan Stanley () is an
investment bank,
retail broker, and
credit card provider with headquarters in
New York City's
Times Square.
Morgan Stanley is a leading global financial services firm, offering a wide variety of products and services. A partial list of these products and services includes:
*
Investment banking services such as advising, securities
underwriting*Institutional sales and trading, including both
equity and
fixed income investments
*
Research services
*Individual investor services such as
credit (see also:
Discover Card), private wealth management, and
financial and estate planning*Traditional investments such as
mutual funds and separately managed accounts
*Alternative investments such as
hedge funds, managed
futures, and
real estateDespite offering such a diverse array of services, Morgan Stanley is an industry leader in many areas, particularly equity and debt underwriting and investment banking. The company considers its brand name and reputation as a longtime leading financial firm among its most valuable assets.
(See
2005 Annual Report).
Morgan Stanley was founded in
New York on
September 5,
1935, by
Henry S. Morgan, and
Harold Stanley of
J. P. Morgan & Co. along with others from Drexel & Co. This split of the commercial and investment banks came as a result of the
Glass-Steagall Act. Within its first year it achieved 24% of market share among public offerings. In 1964 Morgan Stanley created the first computer model for financial analysis. By 1971 the Mergers & Acquisitions business was established along with Sales & Trading. In 1986 Morgan Stanley Group, Inc. became publicly listed.
In 1996, Morgan Stanley acquired
Van Kampen American Capital (
website), a respected mutual fund company.
On
February 5,
1997, the company merged with Dean Witter, and Discover & Co. (a.k.a.
Dean Witter Reynolds) the spun-off financial services business of
Sears Roebuck. The merged company was briefly known as "Morgan Stanley Dean Witter Discover & Co." until 1998 when it was known as "Morgan Stanley Dean Witter & Co." until late 2001. To foster brand recognition and marketing the Dean Witter name was dropped and the firm became "Morgan Stanley". The merger was controversial, and the firm lost some of its
blue chip status with its corporate client base.
Morgan Stanley comprises four main business units:
*
Institutional Securities*
Global Wealth Management Group*
Investment Management*
Credit Services*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
*Morgan Stanley is listed in
The Times Top 100 Graduate Employers, only recently dropping out of the top 40
The Times listed Morgan Stanley 5th in its
20 Best Big Companies to Work For 2006 list
*Former Chairman and CEO:
Philip J. Purcell, who headed
Dean Witter Discover, was Chairman and CEO since the merger until June 30, 2005. He announced his retirement on June 13, 2005 (see "
Recent disputes (2005)"), and John Mack was ultimately named his successor.
*Morgan Stanley is an industry leader in underwriting
Initial public offerings of stock worldwide.
*Morgan Stanley reported net revenues of $52.498 billion in 2005.
*Morgan Stanley ranks as the 30th largest U.S. corporation in 2005.
*In 2004, Morgan Stanley held the #1 industry rank for the following categories: Global Equity and Equity-Related Underwriting Market Share, Global IPO Market Share, and Global Equity Trading Market Share.
*Morgan Stanley had 53,760 total employees worldwide as of August 31, 2005.
*Morgan Stanley is considered the industry leader in
information technology, with an IT budget rivaling the operating budget of many medium and large software companies. Its IT department has also received accolades from the
open source community for its continual work in commercial proliferation and improvement of OSS, including such projects as the
A+ programming language and a
computing architecture which led to the
Stateless Linux project for
Fedora Core.
*Morgan Stanley and Credit Suisse First Boston (CSFB) were principal underwriters of the 2004
Google IPO.
*As of June
2005, the firm's
market capitalization was around $58.5 billion.
*Morgan Stanley was the largest employer in the
World Trade Center prior to the
events of September 11, 2001. In June
2005, the company announced it would return 2,300 workers to lower
Manhattan, marking the largest return of jobs since the attacks.
External links for this section:*
"Visionaries honored with Red Hat Summit Awards"*
Quick factsMisleading financial analysis was disclosed amongst investment banks in the
United Kingdom, but the FSA
Financial Services Authority, decided not to intervene. In criminal activity in the US similar to that alleged in the UK, Morgan Stanley was fined $125 million.
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 alleged regulatory and supervisory lapses.
On May 16, 2005, A
Florida jury found that Morgan Stanley did in fact fail to give adequate information to
Ronald Perelman about
Sunbeam thereby defrauding him and causing damages to him of $604 million. To that $604 million was added punitive damages by the jury for a total of compensatory and punitive
damages of $1.450 billion. Morgan Stanley has stated the decision will be
appealed and is confident the decision will be overturned.
Morgan Stanley asserts many rulings in the trial were "unprecedented and highly prejudicial" (from a statement, see links below). It should be noted that Morgan Stanley lost an estimated $300 million on the
Sunbeam collapse, calling into serious question any alleged
motive on the firm's part. From a
business ethics perspective, it is also questionable whether Morgan Stanley, in its
analyst capacity, was responsible for or even capable of ensuring the accuracy of
Sunbeam financial data, which is generally considered the responsibility of internal and external
accounting faculties.
External links for this section:*
A Jury Assesses Morgan Stanley $604 Million (registration required)*
Morgan Stanley's Comeuppance (registration required)*
Morgan Stanley Will Fight to Have Sunbeam Verdict OverturnedConcerned over lackluster performance, eight former senior Morgan Stanley executives sent a letter to the Board on
March 3,
2005 requesting immediate replacement of Purcell as
CEO. On
March 29, Purcell announced that he would be replacing President Stephan Newhouse, a 26 year Morgan Stanley veteran and former Navy officer, with Zoe Cruz and Steve Crawford, two of Purcell's most recognized supporters. Three days later, the so called "Group of Eight" published a full-page advertisement in the
Wall Street Journal and launched a
website publicising their position.
On
May 12,
2005, dissidents announced a plan to split Morgan Stanley into two firms:one retail (as former Dean Witter) and one institutional firm (as former Morgan Stanley), saying Purcell's plans to merge these two entities had not worked over the past eight years. (See
New York Times article,
May 13,
2005.)
On June 13, 2005 Purcell announced that he would retire as CEO when a successor was found, but no later than March 2006. Former President
John Mack was chosen to succeed Purcell and his appointment was made official by the board of directors on June 30, 2005. Mack announced he would forgo the $25 million per year guaranteed him in his rehiring, preferring instead to be paid based on performance. Purcell's exit package was in excess of $113 million.
Morgan Stanley has been embroiled in a recent series of high-level defections, including Joe Perella, Tarek Meguid, Vikram Pandit, and John Havens. Perella and Meguid have established a boutique mergers and acquisitions advisory firm in New York while Havens has established a hedge fund with Pandit.
In House
*
Morgan Stanley Capital International (MSCI)
Competitors
*
Bear Stearns*
Banc of America Securities*
Citigroup*
Credit Suisse*
Deutsche Bank*
Goldman Sachs*
JPMorganChase*
Lehman Brothers*
Merrill Lynch*
UBS*
Morgan Stanley Homepage*
Discover Card*
Yahoo! - Morgan Stanley Company Profile*
Excite Company Profile*
Morgan Stanley at
Cheatingculture.com - info on scandal, USD $50 million dollar fine, etc.
*
Morgan Stanley CEO surrenders*
John Mack Elected Chairman and CEO of Morgan Stanley*
"Group of Eight" Homepage*
Morgan Stanley Global Economic Forum*
1997 merger discussion and analysis details*Hibbard, J. (
17 January 2005). Morgan Stanley: No stars—and lots of top tech IPOs. In
BusinessWeek, 56 – 58.
*Chernow, Ron (Copyright 1990) The House Of Morgan
*Partnoy, Frank ((c)1997) Penguin Books, NY - F.I.A.S.C.O
