'Morgan Stanley' () is an
investment bank and
retail broker provider headquartered in
New York City.
Overview
Morgan Stanley is a global financial services firm that, through its subsidiaries and affiliates, provides its products and services to customers, including corporations, governments, financial institutions and individuals. The Company operates in three business segments: Institutional Securities, Global Wealth Management Group, and Asset Management.
[1]
★ ''Institutional Securities'' includes capital raising; financial advisory services, including advice on mergers and acquisitions, restructurings, real estate and project finance; corporate lending; sales, trading, financing and market-making activities in equity securities and related products and fixed income securities and related products, including foreign exchange and commodities; benchmark indices and risk management analytics; research; and investment activities.
★ ''Global Wealth Management Group'' provides brokerage and investment advisory services; financial and wealth planning services; annuity and insurance products; credit and other lending products; banking and cash management services; retirement services, and trust and fiduciary services. Global Wealth Management Group serves individual investors and small-to-medium size businesses and institutions with an emphasis on high-net-worth investors. It provides clients with an array of financial solutions comprising Morgan Stanley's products and services, as well as products and services from third-party providers, such as insurance companies and mutual fund families. The Company offers brokerage and investment advisory services covering various investment alternatives, including equities, options, fixed income securities, mutual funds, structured products, alternative investments, unit investment trusts, managed futures, separately managed accounts and mutual fund asset allocation programs. Its financial and wealth planning services offered include education savings programs, as well as annuity and insurance products, including life, disability and long-term care insurance.
★ ''Asset Management'' provides global asset management products and services in equity, fixed income, alternative investments and private equity to institutional and retail clients through third-party retail distribution channels, intermediaries and Morgan Stanley's institutional distribution channel. Morgan Stanley's asset management activities are principally conducted under the Morgan Stanley and Van Kampen brands. It provides asset management products and services to institutional investors worldwide, including pension plans, corporations, private funds, non-profit organizations, foundations, endowments, governmental agencies, insurance companies and banks. Products and services are available to institutional investors primarily through separate accounts, United States mutual funds and other pooled vehicles. Morgan Stanley Investment Management also sub-advises funds for various unaffiliated financial institutions and intermediaries. Morgan Stanley offers open-end funds and separately managed accounts to individual investors through affiliated and unaffiliated broker dealers, banks, insurance companies and financial planners. Closed-end funds managed by Morgan Stanley or Van Kampen are available to individual investors through affiliated and unaffiliated broker dealers.
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 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).
History: mergers, acquisitions, and divestitures
Morgan Stanley was founded in
New York on
September 51935, 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, a respected mutual fund company.
On
February 51997, 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".
On
December 192006, after reporting 4th quarter earnings, Morgan Stanley announced the spinoff of its
Discover Card unit.
Organization
Morgan Stanley comprises four main business units:
★ 'Institutional Securities'
★ 'Global Wealth Management Group'
★ 'Investment Management'
★ 'Credit Services'
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
[2]
★ ''Great Place to Work Institute Japan'' in 2007 ranked Morgan Stanley as the second best corporation to work in Japan, based on the opinions of the employees and the corporate culture
[3]
★ 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
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 122004, Morgan Stanley settled a sex discrimination suit brought by the
Equal Employment Opportunity Commission for $54 million.
On
January 122005, The
New York Stock Exchange imposed a $19 million fine on Morgan Stanley for alleged regulatory and supervisory lapses.
On
May 162005, 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.
On
March 212007, the ruling was overturned and Morgan Stanley was no longer required to pay the 1.57 billion dollar settlement
[4].
Morgan Stanley asserts many rulings in the trial were "unprecedented and highly prejudicial rulings imposed by the judge"
[5]. 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 million 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. Award was rendered by an arbitration panel on 8/15/07 finding denying Claimant's request for relief in the entirety.
Recent disputes (2005)
Concerned over lackluster performance, eight former senior Morgan Stanley executives sent a letter to the Board on
March 32005 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 132005.)
On
June 132005 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 302005. 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.
Awards
2007
★ Euromoney's Global Investment Bank of the Year
★ Best Investment Bank – Spain
★ Best Investment Bank – Luxemburg
★ Best Investment Bank – Taiwan
★ Best M&A House – UK
★ Best M&A House – Denmark
★ Best M&A House – Nordic and Baltic region
★ Best M&A House – Singapore
★ Best M&A House – Hong Kong
★ Best Debt House – China
★ Best Debt House – Singapore
★ Best Debt House – Colombia
★ Best Project Finance House in Latin America
Information found at http://www.euromoney.com/article.asp?PositionID=19&ArticleID=1391891
Notable current and former employees
Business
★
Barton Biggs - hedge fund manager
★
Shelby Bryan - communications executive, best known for affair with
Anna Wintour
★
Vikram Chatwal - hotelier
★
David Darst - chief investment strategist PWM
★
Robert Diamond - president of
Barclays plc
★
Robert Greenhill - founder of
Greenhill & Co.
★
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 - investment banking
★
James A. Runde - investment banking
★
Charles Phillips - president of
Oracle Corporation
★
Steven Rattner - private equity investor
★
Leopold David de Rothschild - financier
★
Ali Sabancı - Turkish businessman
★
David E. Shaw - founder of
D. E. Shaw & Co.
★
Marina Fedorovsky
★
Zoe Cruz - President of Institutional Securities
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)
Other
★
Stephen Frey - author
★
Nathan Haselbauer - founder of
International High IQ Society
★
Nigel Jaquiss - journalist
★
Andy Kessler - author
★
David Grimaldi - advisor
★
Daniel Lian - economist
★
John Myung - poker player
★
James Parrish - professional football player
★
Rick Rescorla - former U.S. Army officer and 9/11 hero
★
Joshua Schachter - creator of
del.icio.us
See also
★
Morgan Stanley Capital International (MSCI)
★
Discover Card
★
Van Kampen Funds
Competitors
★
ABN AMRO
★
Bear Stearns
★
Bank of America Securities
★
Citigroup
★
Credit Suisse
★
Deutsche Bank
★
Goldman Sachs
★
JP Morgan Chase
★
Lehman Brothers
★
Macquarie Bank
★
Merrill Lynch
★
UBS
★
RBC Capital Markets
★
Barclays Capital
★
Thomas Weisel Partners
★
Nomura Securities
★
Lazard
★
Piper Jaffray
★
Wachovia
★
HSBC
★
BNP Paribas
★
Raymond James
★
Rothschild
★
Greenhill
★
Houlihan Lokey
★
Dresdner Kleinwort
References
1. http://finance.google.com/finance?q=ms
2. Times 20 Best Big Companies to Work For 2006 list
3. http://www.greatplacetowork-europe.com/best/list-jp.htm
4. http://www.iht.com/articles/ap/2007/03/21/america/NA-FIN-US-Morgan-Stanley-Perelman.php
5. http://www.cfo.com/article.cfm/4002352?f=ThisWeekInFinance052005
★ 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
★
John Mack Elected Chairman and CEO of Morgan Stanley
External links
★
Morgan Stanley Homepage
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