Morgan Stanley
From Wikipedia, the free encyclopedia
| Morgan Stanley | |
 |
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| Slogan | One client at a time |
|---|---|
| Type | Public |
| Founded | 1935 |
| Headquarters | New York, New York |
| Key people | John J. Mack, Chairman & CEO Zoe Cruz, Co-President, Robert Scully Co-President |
| Industry | Investment services |
| Products | Financial Services Investment Banking |
| Revenue |  $52.498 billion USD (2005) |
| Employees | 53,870 (Feb 2006) |
| Website | www.morganstanley.com |
Morgan Stanley (NYSE: MS) is an investment bank, retail broker, and credit card provider headquartered in New York City.
Contents |
[edit] Overview
Morgan Stanley is a 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 , unit investment trusts and separately managed accounts
- Alternative investments such as hedge funds, managed futures, and real estate
Despite 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).
[edit] History: mergers, acquisitions, and divestitures
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 viable 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.
[edit] Organization
Morgan Stanley comprises four main business units:
- Institutional Securities
- Global Wealth Management Group
- Investment Management
- Credit Services
[edit] Diversity and culture
- 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
- Morgan Stanley has a strong commitment to equal rights for gay, bisexual and transgendered people - recently demonstrated by sponsoring the Mayor's Reception at London's EuroPride 2006 Festival
- Like most other corporations of its' size, has been sued on numerous occasions by former women employees
[edit] Quick facts
- 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 J. 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.
- The upward triangle represents People, Capital, Idea. It's direction represents a bull market
External links for this section:
[edit] Legal proceedings
Misleading 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.
More recently, a class action lawsuit was filed in California by both current and former Morgan Stanley employees for unfair labor practices that were instituted to those employed through the financial advisor training program. A $40 millon settlement was reportedly reached, with expected payout to those employed through the training program between specified dates.
Morgan Stanley is most recently in a case with former employee Louis Rosenwein. Following the collapse of Andrx Corp. Rosenwein sued the company for not allowing him to hedge the stock. The case is taking place in New York City and began in April 2005.
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 Overturned
[edit] Recent disputes (2005)
Concerned 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 publicizing 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.
[edit] Notable current and former employees
[edit] Business
- Barton Biggs - hedge fund manager
- Shelby Bryan - communications executive, best known for affair with Anna Wintour
- Vikram Chatwal - hotelier
- Robert Diamond - president of Barclays plc
- Todd Harrison - founder of Minyanville
- Robert Matschullat - private equity investor
- Mary Meeker - financial analyst
- Joseph R. Perella - co-founder of Perella Weinberg Partners
- Frank Quattrone - financial analyst
- Charles Phillips - president of Oracle Corporation
- Steven Rattner - venture capitalist
- Leopold David de Rothschild - financier
- Ali Sabancı - Turkish businessman
- David Shaw - CEO of D. E. Shaw & Co
[edit] Politics and public service
- Robert H. B. Baldwin - Undersecretary of the U.S. Navy (?)
- Erskine Bowles - White House Chief of Staff (1996-97), U.S. Senatorial candidate
- Evan G. Galbraith - U.S. Ambassador to France (1981-85)
- Jeremy Heywood - Principal Private Secretary to the Prime Minister (1999-2003)
- Mickey Kantor - U.S. Secretary of Commerce (1996-97)
- Philip Lader - U.S. Ambassador to the United Kingdom (1997-2001)
- Francis Maude - Member of the British Parliament (1983-1992, 1997-present)
- Jyotiraditya Scindia - Member of the Lok Sabha (2002-present)
- Kevin Warsh - member of the Board of Governors for the U.S. Federal Reserve System (2006-present)
[edit] Other
- Stephen Frey - author
- Nathan Haselbauer - founder of International High IQ Society
- Nigel Jaquiss - journalist
- Andy Kessler - author
- Daniel Lian - economist
- John Myung - poker player
- James Parrish - professional football player
- Rick Rescorla - former U.S. Army officer
- Joshua Schachter - creater of del.icio.us
[edit] See also
[edit] In House
[edit] Competitors
- ABN AMRO
- Bear Stearns
- Banc of America Securities
- Citigroup
- Credit Suisse
- Deutsche Bank
- Goldman Sachs
- JPMorganChase
- Lehman Brothers
- Merrill Lynch
- UBS
[edit] External links
- 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
[edit] References
- 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
