morgan stanley encyclopedia entry - nationmaster.com
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Morgan Stanley
Type Public (NYSE: MS)
Founded 1935
Headquarters New York, New York
Key people John J. Mack, Chairman & CEO
David Heleniak, Vice Chairman
Zoe Cruz, Co-President,
Robert Scully Co-President,
James P. Gorman COO GWM
Industry Investment services
Products Financial Services
Investment Banking
Investment management
Revenue $76.551 billion USD (2006)
Employees over 55,000(Jun 2007)
Slogan World Wise
Website www.morganstanley.com
Morgan Stanley (NYSE: MS) is one of the largest and the most reputed investment banks headquartered
in New York City. Contents
1 Overview
2 History: mergers, acquisitions, and divestitures
3 Organization
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4 Diversity and culture
5 Legal proceedings
6 FINRA fine for bond sales
7 FINRA fine for e-mails
8 Awards
9 2007
10 Notable current and former employees
10.1 Business
10.2 Politics and public service
10.3 Other
11 See also
11.1 Competitors
12 References
13 External links
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.
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Morgan Stanley's office on Times Square
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 institutionswith 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
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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 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, 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".
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On December 19, 2006, 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
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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. On March 21, 2007, 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
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advisor training program. A $40 million settlement was reportedly reached, with expected payout to
those employed through the training program between specified dates. [citation needed]
FINRA fine for bond sales
On Aug. 2, 2007, the Financial Industry Regulatory Authority (FINRA) announced more than $6 million in
fines and restitution against Morgan Stanley for rule violations related to the sale of corporate bonds to
retail customers at excessive prices. The firm was cited for charging excessive mark-ups in more than
2,800 transactions and for having an inadequate supervisory system for monitoring the pricing of
corporate fixed income securities sold to customers.[6]
FINRA fine for e-mails
On Sept. 27, 2007, FINRA announced a $12.5 million settlement with Morgan Stanley to resolve charges
that the firm's former affiliate, Morgan Stanley DW, Inc. (MSDW), failed on numerous occasions to
provide e-mails to claimants in arbitration proceedings as well as to regulators - while representing that
the destruction of the firm's email servers in the Sept. 11, 2001 terrorist attacks on New York's WorldTrade Center resulted in the loss of all pre-9/11 e-mail. In fact, the firm had millions of pre-9/11 e-mails
that had been restored to the firm's active e-mail system using back-up tapes that had been stored in
another location.[7]
Awards
2007
Financial Times' International Prime Brokerage House of the Year 2005, 2006 and 2007
Euromoney Best Prime Brokerage House 2007
BusinessWeek #1 Prime Brokerage House 2006 and 2007
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Euromoney's Global Investment Bank of the Year
Financial Times Number 3 Best Place to Work in the UK
Newsweek Most Prestigious Global Investment Bank of the Year 2007
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
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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)
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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 who helped in the September 11th evacuation efforts
Joshua Schachter - creator of del.icio.us
Jamie Smith - professional UK athlete and alumni of Royal Holloway.
See also
Morgan Stanley Capital International (MSCI)
Discover Card
Van Kampen Funds
Competitors
ABN AMRO
Barclays Capital
Bear Stearns
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Banc of America Securities LLC
BNP Paribas
Citigroup
Credit Suisse
Deutsche Bank
Dresdner Kleinwort
Goldman Sachs
HSBC
JP Morgan Chase
Lazard
Lehman Brothers
Macquarie Bank
Merrill Lynch
Rothschild
UBS
RBC Capital Markets
Wachovia
References
^ http://finance.google.com/finance?q=ms
^ Times 20 Best Big Companies to Work For 2006 list. Times Online (2004-08-23). Retrieved on 2007-02-
08.
^ http://www.greatplacetowork-europe.com/best/list-jp.htm
^ http://www.iht.com/articles/ap/2007/03/21/america/NA-FIN-US-Morgan-Stanley-Perelman.php
^ http://www.cfo.com/article.cfm/4002352?f=ThisWeekInFinance052005
^ FINRA News Release
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^ FINRA News Release
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