Morgan Stanley is an American multinational

investment management Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institut ...

and

financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...

company headquartered at

1585 Broadway 1585 Broadway, also the Morgan Stanley Building, is a 42-story office building on Times Square in the Theater District neighborhood of Manhattan in New York City. The building was designed by Gwathmey Siegel & Associates Architects and Emery R ...

Midtown Manhattan Midtown Manhattan is the central portion of the New York City borough of Manhattan and serves as the city's primary central business district. Midtown is home to some of the city's most prominent buildings, including the Empire State Buildin ...

, New York City. With offices in more than 41 countries and more than 75,000 employees, the firm's clients include corporations, governments, institutions, and individuals. Morgan Stanley ranked No. 61 in the 2021

Fortune 500 The ''Fortune'' 500 is an annual list compiled and published by ''Fortune'' magazine that ranks 500 of the largest United States corporations by total revenue for their respective fiscal years. The list includes publicly held companies, along ...

list of the largest United States corporations by total revenue. The original Morgan Stanley, formed by J.P. Morgan & Co. partners

Henry Sturgis Morgan Henry Sturgis Morgan Sr. (October 24, 1900 – February 8, 1982) was an American banker, known for being the co-founder of Morgan Stanley and the president and chairman of the Morgan Library & Museum. Early life and education Morgan was b ...

(a grandson of

J.P. Morgan JP may refer to: Arts and media * ''JP'' (album), 2001, by American singer Jesse Powell * ''Jp'' (magazine), an American Jeep magazine * ''Jönköpings-Posten'', a Swedish newspaper * Judas Priest, an English heavy metal band * ''Jurassic Park ...

Harold Stanley Harold Stanley (October 2, 1885 – May 14, 1963) was an American businessman and one of the founders of Morgan Stanley in 1935. For 20 years, he ran Morgan Stanley until he left the firm in 1955. Early life Stanley was born in Great Barring ...

, and others, came into existence on September 16, 1935, in response to the Glass–Steagall Act, which required the splitting of American commercial and investment banking businesses. In its first year, the company operated with a 24% market share (US$1.1 billion) in public offerings and

private placement Private placement (or non-public offering) is a funding round of securities which are sold not through a public offering, but rather through a private offering, mostly to a small number of chosen investors. Generally, these investors include friend ...

s. The current Morgan Stanley is the result of the merger of the original Morgan Stanley with Dean Witter Discover & Co. in 1997. Dean Witter's Chairman and CEO,

Philip J. Purcell Philip J. Purcell (born 1943) is an American businessman. Purcell is a former chairman and CEO of Morgan Stanley, where he worked in the late 1990s and 2000s. He was previously chairman and CEO of Dean Witter, Discover and managed the firm unde ...

, became the Chairman and CEO of the newly merged "Morgan Stanley Dean Witter Discover & Co." The new firm changed its name back to "Morgan Stanley" in 2001. The main areas of business for the firm today are institutional securities, wealth management and

. The bank is considered systemically important by the Financial Stability Board.

Overview

Morgan Stanley is a

corporation that, through its affiliates and subsidiaries, advises, and originates, trades, manages, and distributes capital for institutions, governments, and individuals. The company operates in three business segments: Institutional Securities, Wealth Management, and Investment Management.

History

The original Morgan Stanley (1935–1997)

Morgan Stanley traces its roots to J.P. Morgan & Co. Following the Glass–Steagall Act, it was no longer possible for a corporation to have investment banking and commercial banking businesses under a single holding entity. J.P. Morgan & Co. chose the commercial banking business over the investment banking business. As a result, some of the employees of J.P. Morgan & Co., most notably Henry S. Morgan and

, left J.P. Morgan & Co. and joined others from the Drexel partners to form Morgan Stanley. The firm formally opened the doors for business on September 16, 1935, at 2

Wall Street Wall Street is an eight-block-long street in the Financial District of Lower Manhattan in New York City. It runs between Broadway in the west to South Street and the East River in the east. The term "Wall Street" has become a metonym for t ...

, New York City, just down the street from J.P Morgan. The firm was involved with the distribution of 1938 US$100 million of debentures for the

United States Steel Corporation United States Steel Corporation, more commonly known as U.S. Steel, is an American integrated steel producer headquartered in Pittsburgh, Pennsylvania, with production operations primarily in the United States of America and in several countries ...

as the lead underwriter. The firm also obtained the distinction of being the lead syndicate in the 1939 U.S. rail financing. The firm went through a reorganization in 1941 to allow for more activity in its securities business. The firm was led by Perry Hall, the last founder to lead Morgan Stanley, from 1951 until 1961. During this period, the firm co-managed the World Bank's triple-A-rated bonds offering of 1952, as well as coming up with

General Motors The General Motors Company (GM) is an American Multinational corporation, multinational Automotive industry, automotive manufacturing company headquartered in Detroit, Michigan, United States. It is the largest automaker in the United States and ...

' US$300 million debt issue, US$231 million IBM stock offering, and the US$250 million AT&T's debt offering. Morgan Stanley credits itself with having created the first viable computer model for financial analysis in 1962, thereby starting a new trend in the field of financial analysis. Future president and chairman Dick Fisher contributed to the computer model as a young employee, learning the FORTRAN and

COBOL COBOL (; an acronym for "common business-oriented language") is a compiled English-like computer programming language designed for business use. It is an imperative, procedural and, since 2002, object-oriented language. COBOL is primarily us ...

programming languages at IBM. In 1967, it established the Morgan & Cie, International in Paris in an attempt to enter the European securities market. The firm acquired Brooks, Harvey & Co., Inc. in 1967 and established a presence in the real estate business. The sales and trading business is believed to be the brainchild of Bob Baldwin. In 1996, Morgan Stanley acquired

Van Kampen Van Kampen is a Dutch toponymic surname meaning "from Kampen", where Kampen usually refers to Kampen, Overijssel. Morgan Stanley Historical Logo

On February 5, 1997, the company merged with Dean Witter Discover & Co., the spun-off financial services business of Sears Roebuck. Dean Witter's Chairman and CEO,

, continued to hold the same roles in the newly merged "Morgan Stanley Dean Witter Discover & Co." Morgan Stanley’s president John J. Mack became the firm’s president and chief operating officer. In 1998, the name of the firm was changed to "Morgan Stanley Dean Witter & Co." Originally, the name was chosen to be the combination of the two predecessor companies in order to avoid tension between the two firms. Eventually in 2001 "Dean Witter" was further dropped and the name became "Morgan Stanley" for unrevealed reasons. The merged firm began expanding overseas operations: in 1999, Mack set up a joint venture in India with local partner JM Financial. Morgan Stanley had offices located on 35 floors across buildings 1, 2, and 5 of the World Trade Center, and was the largest tenant of the WTC complex. Most of these offices had been inherited from Dean Witter which had occupied the space since the mid-1980s. The firm lost 13 employees during the September 11 attacks in 2001 (Thomas F. Swift, Wesley Mercer, Jennifer de Jesus, Joseph DiPilato, Nolbert Salomon, Godwin Forde, Steve R. Strauss, Lindsay C. Herkness, Albert Joseph, Jorge Velazquez, Titus Davidson, Charles Laurencin and Security Director

Rick Rescorla Cyril Richard Rescorla (May 27, 1939 – September 11, 2001) was a British-American soldier, police officer, educator and private security specialist. He served as a British Army paratrooper during the Cyprus Emergency and a commissioned officer ...

) in the towers, while 2,687 were successfully evacuated by Rick Rescorla. The surviving employees moved to temporary headquarters in the vicinity. In 2005 Morgan Stanley moved 2,300 of its employees back to

lower Manhattan Lower Manhattan (also known as Downtown Manhattan or Downtown New York) is the southernmost part of Manhattan, the central borough for business, culture, and government in New York City, which is the most populated city in the United States with ...

, at that time the largest such move. left, Morgan Stanley Children's Hospital of New York-Presbyterian is the only stand-alone pediatric hospital in New York City and is part of New York-Presbyterian Hospital. In 2003, NewYork–Presbyterian Hospital named the Morgan Stanley Children's Hospital in recognition of the firm's sponsorship of the hospital, which largely funded its construction through philanthropy. The initiative began under CEO

and was completed under

John Mack John Mack may refer to: * John Martin Mack (1715–1784), Moravian bishop * John Mack (Medal of Honor recipient) (1843–1881), American Civil War sailor and Medal of Honor recipient * John J. Mack (coach) (1870–1923), Yale University track coac ...

. Employees at the firm have been involved with the hospital since the 1990s and personally donated to the construction of the current child-friendly building, which opened in November 2003. The company found itself in the midst of a management crisis starting in March 2005 that resulted in a loss of the firm's staff. Purcell resigned as CEO of Morgan Stanley in June 2005 when a highly public campaign by former Morgan Stanley partnersChief Will Leave Morgan Stanley, Ending Struggle
''The New York Times'', June 14, 2005 threatened to damage the firm and challenged his refusal to aggressively increase leverage, increase risk, enter the sub-prime mortgage business and make expensive acquisitions; the same strategies that forced Morgan Stanley into massive write-downs, related to the

subprime mortgage crisis The United States subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the Financial crisis of 2007–2008, 2007–2008 global financial crisis. It was triggered by a large decline ...

, by 2007.The Reward for Leaving: $113 Million
''The New York Times'', July 8, 2005 On December 19, 2006, Morgan Stanley announced the spin-off of its Discover Card unit. The bank completed the spinoff of Discover Financial on June 30, 2007. In February 2007, Morgan Stanley announced the end of its Indian joint venture: the bank acquired its local partner's stake in the institutional brokerage business, and sold its own stake in the other businesses. The bank then set up a wholly-owned subsidiary; the country head of Investment Management, Narayan Ramachandran, became CEO of the new subsidiary. Aisha de Sequeira, a Managing Director in the Mergers and Acquisitions group, was made Head of Investment Banking. In order to cope with the write-downs during the subprime mortgage crisis, Morgan Stanley announced on December 19, 2007, that it would receive a US$5 billion capital infusion from the China Investment Corporation in exchange for securities that would be convertible to 9.9% of its shares in 2010. The bank's Process Driven Trading unit was amongst several on Wall Street caught in a

short squeeze In the stock market, a short squeeze is a rapid increase in the price of a stock owing primarily to an excess of short selling of a stock rather than underlying fundamentals. A short squeeze occurs when there is a lack of supply and an excess of d ...

, reportedly losing nearly $300 million in one day. The bubble's subsequent collapse was considered to be a central feature of the financial crisis of 2007–2010. The bank was contracted by the United States Treasury in August 2008 to advise the government on potential rescue strategies for Fannie Mae and Freddie Mac. Within days, Morgan Stanley itself was at risk of failure, with rapidly changing prospects, regulatory model and ownership stakes over the course of four weeks from mid-September to mid-October 2008. The bank Morgan Stanley was reported to have lost over 80% of its market value between 2007 and 2008 during the financial crisis. On September 17, 2008, the British evening-news analysis program '' Newsnight'' reported that Morgan Stanley was facing difficulties after a 42% slide in its share price in two days. CEO

John J. Mack John J. Mack (born November 17, 1944) is a senior advisor to the Investment company, investment firm Kohlberg Kravis Roberts and the former CEO and chairman of the board at Morgan Stanley, the New York City, New York-based investment bank and brok ...

wrote in a memo to staff "we're in the midst of a market controlled by fear and rumours and short-sellers are driving our stock down." By September 19, 2008, the share price had slid 57% in four days, and the company was said to have explored merger possibilities with CITIC, Wachovia,

HSBC HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tri ...

Standard Chartered Standard Chartered plc is a multinational bank with operations in consumer, corporate and institutional banking, and treasury services. Despite being headquartered in the United Kingdom, it does not conduct retail banking in the UK, and around 9 ...

, Banco Santander and

Nomura Nomura (written: 野村 "field village" or 埜村 "wilderness village") is a Japanese surname. Notable people with the surname include: * Don Nomura (born 1957), Japanese-American baseball agent * Katsuhiro Nomura, Japanese voice actor, includi ...

. At one point, Hank Paulson offered Morgan Stanley to JPMorgan Chase at no cost, but JPMorgan's

Jamie Dimon James Dimon (; born March 13, 1956) is an American billionaire businessman and banker who has been the chairman and chief executive officer of JPMorgan Chase – the largest of the big four American banks – since 2005. Dimon was previously on ...

refused the offer. Morgan Stanley and

Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...

, the last two major investment banks in the US, both announced on September 22, 2008, that they would become traditional bank holding companies regulated by the Federal Reserve. The Federal Reserve's approval of their bid to become banks ended the ascendancy of securities firms, 75 years after Congress separated them from deposit-taking lenders, and capped weeks of chaos that sent

Lehman Brothers Holdings Inc. Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, a ...

into bankruptcy and led to the rushed sale of Merrill Lynch & Co. to

Bank of America Corp. The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. The bank w ...

MUFG Bank, Japan's largest bank, invested $9 billion in a direct purchase of a 21% ownership stake in Morgan Stanley on September 29, 2008. The payment from MUFG was supposed to be wired electronically; however, because it needed to be made on an emergency basis on Columbus Day when banks were closed in the US, MUFG cut a US$9 billion physical check, the largest amount written via physical check at the time. The physical check was accepted by

Robert A. Kindler Robert A. Kindler is the Global Head of Mergers and Acquisitions and Vice Chairman of Morgan Stanley. He also is on the Management Committee at Morgan Stanley. He graduated magna cum laude from Colgate University (majoring in romantic poetry and m ...

, Global Head of Mergers and Acquisitions and Vice Chairman of Morgan Stanley, at the offices of Wachtell Lipton. Concerns over the completion of the Mitsubishi deal during the October 2008 stock market volatility caused a dramatic fall in Morgan Stanley's stock price to levels last seen in 1994. It recovered once Mitsubishi UFJ's 21% stake in Morgan Stanley was completed on October 14, 2008. Morgan Stanley borrowed $107.3 billion from the Fed during the 2008 crisis, the most of any bank, according to data compiled by Bloomberg News Service and published August 22, 2011. In 2009, Morgan Stanley purchased Smith Barney from

Citigroup Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking ...

and the new broker-dealer operates under the name

Morgan Stanley Smith Barney Morgan Stanley Wealth Management is an American multinational financial services corporation specializing in retail brokerage. It is the wealth & asset management division of Morgan Stanley. On January 13, 2009, Morgan Stanley and Citigroup annou ...

, the largest wealth management business in the world. In November 2013, Morgan Stanley announced that it would invest $1 billion to help improve affordable housing as part of a wider push to encourage investment in efforts that aid economic, social and environmental sustainability. In July 2014, Morgan Stanley's Asian private equity arm announced it had raised around $1.7 billion for its fourth fund in the area. In December 2015, it was reported that Morgan Stanley would be cutting around 25 percent of its fixed income jobs before month end. In January 2016, the company reported that it had offices in "more than" 43 countries. In October 2020, the company completed its acquisition of

E*Trade E-Trade Financial Corporation (stylized as E*TRADE) is a financial services subsidiary of Morgan Stanley, which offers an electronic trading platform to trade financial assets. The company receives revenue from interest income on margin balanc ...

, a deal announced in February 2020 for $13 billion, the biggest acquisition by a U.S. bank since the global financial crisis. In March 2021, Morgan Stanley completed its acquisition of Eaton Vance, a deal announced in October 2020. With the addition of Eaton Vance, Morgan Stanley now had $5.4 trillion of client assets across its Wealth Management and Investment Management segments.

Organization

The company's 3 divisions are as follows:

Institutional Securities Group

Morgan Stanley's Institutional Securities is the most profitable business segment. This business segment provides institutions with

investment banking Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated wit ...

services such as capital raising and financial advisory services such as

mergers and acquisitions Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...

advisory, restructurings, real estate and project finance, and corporate lending. The segment also encompasses the Equities and the Fixed Income divisions of the firm; trading is anticipated to maintain its position as the "engine room" of the company. Among the major U.S. banks, Morgan Stanley sources the highest portion of revenues from fixed income underwriting which was reported at 6.0% of total revenue in FY12.

Wealth Management

The Global Wealth Management Group provides

stockbroker A stockbroker is a regulated broker, broker-dealer, or registered investment adviser (in the United States) who may provide financial advisory and investment management services and execute transactions such as the purchase or sale of stocks an ...

age and investment advisory services. This segment provides financial and wealth planning services to its clients, who are primarily high-net-worth individuals. On January 13, 2009, the Global Wealth Management Group was merged with Citi's Smith Barney to form Morgan Stanley Smith Barney. Morgan Stanley owned 51% of the entity, and Citi held 49%. On May 31, 2012, Morgan Stanley exercised its option to purchase an additional 14% of the joint venture from Citi. In June 2013, Morgan Stanley stated it had secured all regulatory approvals to buy Citigroup's remaining 35% stake in Smith Barney and would proceed to finalize the deal. In February 2019, the company announced the acquisition of Solium Capital, a manager of employee stock plans, for $900 million. In October 2020, the company completed its acquisition of

, a deal announced in February 2020 for $13 billion, the biggest acquisition by a U.S. bank since the global financial crisis.

Investment Management

Investment Management Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institut ...

provides asset management products and services in equity, fixed income, alternative investments, real estate investment, 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 were principally conducted under the Morgan Stanley and Van Kampen brands until 2009. On October 19, 2009, Morgan Stanley announced that it would sell Van Kampen to Invesco for $1.5 billion, but would retain the Morgan Stanley brand. 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. On September 29, 2013, Morgan Stanley announced a partnership with Longchamp Asset Management, a French-based asset manager that specializes in the distribution of UCITS hedge funds, and La Française AM, a multi-specialist asset manager with a 10-year track record in alternative investments. In March 2018, Morgan Stanley acquired Mesa West, a leading U.S. commercial real estate credit platform, adding to its existing investment strategies and product offerings across real assets and private credit. In March 2021, Morgan Stanley completed its acquisition of Eaton Vance, a deal announced in October 2020. With the addition of Eaton Vance, Morgan Stanley now had $5.4 trillion of client assets across its Wealth Management and Investment Management segments.

Awards and honors

* In 2020 Morgan Stanley was named IFR's Bank of the Year, and in 2021 Morgan Stanley was named Euromoney's best investment bank in the world. * Fast Company named Morgan Stanley in its list of Best Workplaces for Innovators in 2020 and 2021. * ''Great Place to Work Institute Japan'' in 2007 ranked Morgan Stanley as the second best corporation to work in

Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...

, based on the opinions of the employees and the corporate culture. * '' The Times'' listed Morgan Stanley 5th in its ''20 Best Big Companies to Work For 2006''. * Morgan Stanley was named one of the 100 Best Companies for Working Mothers in 2004 by '' Working Mother''. * ''Family Digest'' named Morgan Stanley one of the "Best Companies for African Americans" in June 2004.

Lawsuits

2000s

In 2003, Morgan Stanley agreed to pay $125 million to settle its portion of a $1.4 billion settlement of a suit brought by

Eliot Spitzer Eliot Laurence Spitzer (born June 10, 1959) is an American politician and attorney. A member of the Democratic Party (United States), Democratic Party, he was the 54th governor of New York from 2007 until his resignation in 2008. Spitzer was b ...

, the

Attorney General of New York The attorney general of New York is the chief legal officer of the U.S. state of New York and head of the Department of Law of the state government. The office has been in existence in some form since 1626, under the Dutch colonial government o ...

, the National Association of Securities Dealers (now the Financial Industry Regulatory Authority (FINRA), the United States

Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

(SEC), and a number of state securities regulators, relating to intentionally misleading research motivated by a desire to win investment banking business with the companies covered. In 2004, Morgan Stanley settled a sex discrimination suit brought by the Equal Employment Opportunity Commission for $54 million. In 2007, the firm agreed to pay $46 million to settle a class action lawsuit brought by eight female brokers. In July 2004, the firm paid NASD a $2.2 million fine for more than 1,800 late disclosures of reportable information about its brokers. In September 2004, the firm paid a $19 million fine imposed by NYSE for failure to deliver prospectuses to customers in registered offerings, inaccurate reporting of certain program trading information, short sale violations, failures to fingerprint new employees and failure to timely file exchange forms. The New York Stock Exchange imposed a $19 million fine on January 12, 2005, for alleged regulatory and supervisory lapses. At the time, it was the largest fine ever imposed by the NYSE. On May 16, 2005, a Florida jury found that Morgan Stanley failed to give adequate information to Ronald Perelman about

Sunbeam A sunbeam, in meteorological optics, is a beam of sunlight that appears to radiate from the position of the Sun. Shining through openings in clouds or between other objects such as mountains and buildings, these beams of particle-scattered sunl ...

thereby defrauding him and causing damages to him of $604 million. In addition, punitive damages were added for total damages of $1.450 billion. This verdict was directed by the judge as a sanction against Morgan Stanley after the firm's attorneys infuriated the court by failing and refusing to produce documents, and falsely telling the court that certain documents did not exist. The ruling was overturned on March 21, 2007, and Morgan Stanley was no longer required to pay the $1.57 billion verdict. Morgan Stanley settled a class-action lawsuit on March 2, 2006. It had been filed in California by both current and former Morgan Stanley employees for unfair labor practices instituted to those in the financial advisor training program. Employees of the program had claimed the firm expected trainees to clock overtime hours without additional pay and handle various administrative expenses as a result of their expected duties. A $42.5 million settlement was reached and Morgan Stanley admitted no fault. In May the firm agreed to pay a $15 million fine. The Securities and Exchange Commission accused the firm of deleting emails and failing to cooperate with SEC investigators. FINRA announced a $12.5 million settlement with Morgan Stanley on September 27, 2007. This resolved charges that the firm's former affiliate, Morgan Stanley DW, Inc. (MSDW), failed on numerous occasions to provide emails to claimants in arbitration proceedings as well as to regulators. The company had claimed that the destruction of the firm's email servers in the September 11 attacks in 2001, terrorist attacks on New York's World Trade Center resulted in the loss of all emails before that date. In fact, the firm had millions of earlier emails that had been retrieved from backup copies stored in another location that was not destroyed in the attacks. Customers who had lost their arbitration cases against Morgan Stanley DW Inc. because of their inability to obtain these emails to demonstrate Morgan Stanley's misconduct received a token amount of money as a result of the settlement. In July 2007, Morgan Stanley agreed to pay $4.4 million to settle a class-action lawsuit. The firm was accused of incorrectly charging clients for storage of precious metals. Under a settlement with New York Attorney General Andrew M. Cuomo, the firm agreed to repurchase approximately $4.5 billion worth of

auction rate securities An auction rate security (ARS) typically refers to a debt instrument (corporate or municipal bonds) with a long-term nominal maturity for which the interest rate is regularly reset through a Dutch auction. Since February 2008, most such auctions ...

. The firm was accused of misrepresenting auction rate securities in their sales and marketing. In March 2009, FINRA announced Morgan Stanley was to pay more than $7 million for misconduct in the handling of the accounts of 90 Rochester, New York-area retirees. The Financial Services Authority fined the firm £1.4m for failing to use controls properly relating to the actions of a rogue trader on one of its trading desks. Morgan Stanley admitted on June 18, 2008, this resulted in a $120m loss for the firm.

2010s

In April, the Commodity Futures Trading Commission announced the firm agreed to pay $14 million related to an attempt to hide prohibited trading activity in oil futures. Garth R. Peterson, one of Morgan Stanley's highest-ranking real estate executives in China, pleaded guilty on April 25 to violating U.S. federal anti-corruption laws. He was charged with secretly acquiring millions of dollars' worth of property investments for himself and a Chinese government official. The official steered business to Morgan Stanley. Morgan Stanley agreed to pay a $5 million fine to the

Commodity Futures Trading Commission The Commodity Futures Trading Commission (CFTC) is an independent agency of the US government created in 1974 that regulates the U.S. derivatives markets, which includes futures, swaps, and certain kinds of options. The Commodity Exchange Ac ...

and an additional $1.75 million to CME and the

Chicago Board of Trade The Chicago Board of Trade (CBOT), established on April 3, 1848, is one of the world's oldest futures and options exchanges. On July 12, 2007, the CBOT merged with the Chicago Mercantile Exchange (CME) to form CME Group. CBOT and three other excha ...

. Morgan Stanley employees improperly executed fictitious sales in Eurodollar and Treasury Note futures contracts. On August 7, 2012, it was announced that Morgan Stanley would pay $4.8 million in fines to settle a price-fixing scandal, which had been estimated to have cost New Yorkers $300 million to date. Morgan Stanley made no admission of any wrongdoing; however, the Justice Department commented that they hoped this would "send a message to the banking industry". In '' Morgan Stanley v. Skowron'', 989 F. Supp. 2d 356 (S.D.N.Y. 2013), applying New York's

faithless servant The faithless servant doctrine is a doctrine under the laws of a number of states in the United States, and most notably New York State law, pursuant to which employees who act unfaithfully towards their employers must forfeit to their employers a ...

doctrine to a case involving Morgan Stanley's hedge fund subsidiary, United States District Judge

Shira Scheindlin Shira A. Scheindlin (; born 1946) is an American attorney and jurist who served as a United States district judge of the United States District Court for the Southern District of New York. Early life and education Scheindlin was born in Washing ...

held that a hedge fund's employee engaging in

insider trading Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...

in violation of his company's code of conduct, which also required him to report his misconduct, must repay his employer the full $31 million his employer paid him as compensation during his period of faithlessness. Judge Scheindlin called the insider trading the "ultimate abuse of a

portfolio manager A portfolio manager (PM) is a professional responsible for making investment decisions and carrying out investment activities on behalf of vested individuals or institutions. Clients invest their money into the PM's investment policy for future grow ...

's position". The judge also wrote:"In addition to exposing Morgan Stanley to government investigations and direct financial losses, Skowron's behavior damaged the firm's reputation, a valuable corporate asset." In February, Morgan Stanley agreed to pay $1.25 billion to the US government, as a penalty for concealing the full risk associated with mortgage securities with the Federal Housing Finance Agency. In September 2014, Morgan Stanley agreed to pay $95 million to resolve a lawsuit by the Public Employees' Retirement System of Mississippi (MissPERS) and the West Virginia Investment Management Board. Morgan Stanley was accused of misleading investors in mortgage-backed securities. In May 2015, Morgan Stanley was fined $2 million for

short interest The short interest ratio (also called days-to-cover ratio) represents the number of days it takes short sellers on average to cover their positions, that is repurchase all of the borrowed shares. It is calculated by dividing the number of shares s ...

reporting and rule violations for more than six years, by FINRA. February 2016, Morgan Stanley will pay $3.2 billion to settle with state and federal authorities over Morgan Stanley's creation of mortgage-backed bonds before the financial crisis. August 2016, Morgan Stanley Hong Kong Securities Ltd. was fined HK$18.5 million ($2.4 million) by Hong Kong's securities regulator, Securities and Futures Commission, for violations of Hong Kong's Code of Conduct. Included was Morgan Stanley's failure to avoid a conflict of interest between principal and agency trading. December 2016, another unit of Morgan Stanley paid $7.5 million to settle customer protection rule violations. In January 2017, the corporation was fined $13 million due to overbilling and violating investor asset safeguarding custody rules. Morgan Stanley agreed to pay the fine without commenting on the charges. NS5865 Office building on Waterloo Street

NS5865 Office building on Waterloo Street

Douglas E. Greenberg, a broker, was fired in 2018 after it was reported that four women from

Lake Oswego, Oregon Lake Oswego () is a city in the U.S. state of Oregon, primarily in Clackamas County, with small portions extending into neighboring Multnomah and Washington counties. Located about south of Portland and surrounding the Oswego Lake, the town was ...

, had sought police protection against him over a 15-year period on allegations of harassment, threats, and assault. According to the report, Morgan Stanley executives were aware of the allegations, and knew of at least two arrests and a federal subpoena against him, but did not take any action. The story was called a #MeToo moment for Portland's financial service industry. He managed tens of millions of dollars, and had made the 2018 ''Forbes'' list for top wealth advisors in Oregon. In December 2018, FINRA announced a $10 million fine against Morgan Stanley for failures in its anti-money laundering compliance. Morgan Stanley violated the Bank Secrecy Act over a period of five years. In April 2019, Morgan Stanley agreed to pay $150 million to settle charges that it had misled two large California public pension funds about the risks of mortgage-backed securities. California Attorney General

Xavier Becerra Xavier Becerra ( ; ; born January 26, 1958) is an American lawyer and politician serving as the 25th United States secretary of health and human services since March 2021. Becerra previously served as the attorney general of California from Jan ...

commented: "Morgan Stanley lied about the risk of its products and put profits over teachers and public employees who relied on its advice." Morgan Stanley denied wrongdoing. In November 2019, Morgan Stanley fired or placed on leave four traders for suspected securities mismarking. The firm suspected that $100–140 million in losses were concealed by the mismarking of the value of the securities. Morgan Stanley paid a $1.5 million fine to settle SEC claims that it put client money into more expensive mutual fund share classes when cheaper options were available despite representations to clients that it used tools to find the least costly option.

2020s

2020

In May 2020, Morgan Stanley agreed to pay a $5 million penalty to settle allegations made by the SEC that the corporation provided misleading information to some clients in the retail wrap fee programs regarding trade-execution services and transaction costs.

Current and former chief executives

''The position of chief executive was known as president until 1991; the position was not in use between 1961 and 1970 as Morgan Stanley was a partnership during this period.'' #

(1935–1951) # Perry Hall (1951–1961) # Samuel B. Payne (1970–1971) # Chester H. Lasell (1971–1972) #

Robert H. B. Baldwin Robert Hayes Burns Baldwin (July 9, 1920 – January 3, 2016) was the chairman of Morgan Stanley when the bank was taken public in the 1970s. He is noted for significantly expanding the wealth of the firm during his tenure there. He was also ...

(1973–1982) #

S. Parker Gilbert Seymour Parker Gilbert III (November 15, 1933 – May 27, 2015) was Chairman of Board and President of Morgan Stanley from 1983 until 1990. Career While Gilbert was the Chairman of Board and President of Morgan Stanley from 1983 until 1990, the ...

(1983–1984) #

Richard B. Fisher Richard B. Fisher (1936 – December 16, 2004) was president and chairman of the securities firm Morgan Stanley. Early life and education Fisher was born in Philadelphia. In 1944 at age 8, Fisher contracted a severe case of polio. Doctors told ...

(1984–1997) # Phil Purcell (1997–2005) #

(2005–2009) # James P. Gorman (2009–present)

Global and other headquarters

The Morgan Stanley world headquarters are located in New York City, the European headquarters are in London, Asia Pacific headquarters are in both Hong Kong and Tokyo, Canada headquarters in Toronto.

Notable alumni

Dan Ammann Dan Ammann is a New Zealand business executive. He is the former CEO of Cruise, having served as the President of General Motors (GM) between 2015 and 2019. Ammann joined GM as Treasurer following its 2009 bankruptcy, and also served as the com ...

, Chief Executive Officer, Cruise Automation *

Barton Biggs Barton Michael Biggs (November 26, 1932 – July 14, 2012) was a money manager whose attention to emerging markets marked him as one of the world's first and foremost global investment strategists, a position he held—after inventing it in 1985� ...

, author and hedge fund manager * Erskine Bowles, Clinton White House Chief of Staff * Mike Chen, YouTuber *

Richard A. Debs Barbara Knowles Debs, Ph.D. (born in 1931) is an American art historian who was the president of Manhattanville College from 1975 to 1985. She was the president of the New-York Historical Society from 1989 to 1992. She serves on the board of dire ...

, Chairman of Carnegie Hall; Middle East power-broker * Bob Diamond, former Chief Executive Officer, Barclays *

, Chairman * Bob Diamond, former Chief Executive Officer, Barclays of the Board, Rockefeller University and Bard College; member, Trilateral Commission * Eric Gleacher, Founder of Gleacher & Co. *

Nina Godiwalla Nina Adil Godiwalla (born April 16, 1975) is an American author and businesswoman. She is CEO of MindWorks Leadership and the author of ''Suits: A Woman on Wall Street''. Background and education Godiwalla, the third of four daughters of Adil an ...

, author of Suits: A Woman on Wall Street * David Grimaldi, Chief Administrative Officer, New Castle County Government *

John Havens John E. Havens (born 1956 or 1957) is the former chairman of Citigroup spinoff, Napier Park Global Capital, and is also the former president and chief operating officer of Citigroup. Career Havens graduated from Harvard University in 1979 and ...

, former President, Citigroup, Inc. *

Nigel MacEwan Nigel Savage MacEwan (born March 21, 1933) is an American investment banker who served as chairman and chief executive of Kleinwort Benson North America from 1987 to 1993. Prior to Kleinwort Benson, he was the president of investment banking and ...

, former Chief Executive Officer, Kleinwort Benson North America; former President,

Merrill Lynch Merrill (officially Merrill Lynch, Pierce, Fenner & Smith Incorporated), previously branded Merrill Lynch, is an American investment management and wealth management division of Bank of America. Along with BofA Securities, the investment bank ...

, Chairman of the Board of

New York-Presbyterian Hospital The NewYork-Presbyterian Hospital is a nonprofit academic medical center in New York City affiliated with two Ivy League medical schools, Cornell University and Columbia University. The hospital comprises seven distinct campuses located in the New Y ...

* Mary Meeker, Kleiner Perkins partner and founder, Bond Capital *

Mitchell M. Merin Mitchell M. Merin (born August 1953) served as President and Chief Operating Officer of Morgan Stanley's investment management division (MSIM) from 1998 to 2005. Early life and education Merin was born in August 1953 in Hartford, Connecticut. He ...

, financial executive *

Eileen Murray Eileen Murray (born 1958) is an American financial services executive and is the former co-CEO at Bridgewater Associates, one of the world's largest institutional asset managers. Murray has also held executive positions at Morgan Stanley, Credit Su ...

, Co-President, Bridgewater Associates * Dr.

Ann Olivarius Ann Olivarius (born 19 February 1955) is an American-British lawyer who specializes in cases of civil litigation, sexual discrimination, and sexual harassment, assault, and abuse. Early life and education Ann Olivarius grew up in New Jersey, th ...

, Chair
McAllister Olivarius
trans-Atlantic employment and discrimination lawyer *

Stephen A. Oxman Stephen Alan Oxman (born 1945) was United States Assistant Secretary of State for European and Canadian Affairs from 1993 to 1994. Biography Stephen A. Oxman was educated at Princeton University, graduating '' magna cum laude'' with a B.A. in 1967 ...

, Assistant Secretary of State; Chair, Princeton University Board of Trustees *

Vikram Pandit Vikram Shankar Pandit (born 14 January 1957) is an Indian-American banker and investor who was the chief executive officer of Citigroup from December 2007 to 16 October 2012 and is the current chairman and chief executive officer of The Oroge ...

, former Chief Executive Officer, Citigroup *

Joseph R. Perella Joseph R. Perella (born September 20, 1941) is an American financier. Early life Perella was born in Newark, New Jersey, to an accountant. Perella attended Lehigh University on a full scholarship. During his time at Lehigh, Perella was a member ...

, philanthropist; Founder of Perella Weinberg Partners *

Charles E. Phillips Charles E. Phillips (born June 1959)Kalte, Pamela M. (ed)''Contemporary Black Biography, Volume 57'' Gale Research Inc., 2007. pp. 107–108. (reprint is an American business executive in the tech industry. He is the co-founder of Recognize, a ...

, former President of Oracle, Inc.; C.E.O. of Infor * Ruth Porat, Chief Financial Officer; Alphabet Inc. *

Frank Quattrone Frank Quattrone (born 1955) is an American technology investment banker who started technology sector franchises at Morgan Stanley, Deutsche Bank, and Credit Suisse First Boston. He helped bring dozens of technology companies public during the 19 ...

, Founder, Qatalyst Group *

Steven Rattner Steven Lawrence Rattner (born July 5, 1952) is a New York investment asset manager who served as lead adviser to the Presidential Task Force on the Auto Industry in 2009.

, private equity manager and commentator *

Stephen S. Roach Stephen Samuel Roach (born September 16, 1945) is an American economist. He serves as senior fellow at Yale University’s Jackson Institute for Global Affairs, and a senior lecturer at the Yale School of Management. He was formerly chairman of ...

, Yale University professor * Benjamin M. Rosen, Co-founder, Compaq Computer; Chairman, California Institute of Technology *

David E. Shaw David Elliot Shaw (born March 29, 1951) is an American billionaire scientist and former hedge fund manager. He founded D. E. Shaw & Co., a hedge fund company which was once described by '' Fortune'' magazine as "the most intriguing and mysterio ...

, hedge fund manager *

Chip Skowron use both this parameter and , birth_date to display the person's date of birth, date of death, and age at death) --> , death_place = , death_cause = , body_discovered = , resting_place = , resting_place_coordinates = ...

, hedge fund portfolio manager convicted of insider trading * Bjarne Stroustrup, developer of the C++ programming language *

John J. Studzinski John Joseph Paul Studzinski, CBE (born March 19, 1956) is an American-British investment banker and philanthropist. Since September 2018 he has been Managing Director and Vice Chairman of the global investment-management firm PIMCO. Prior to j ...

, CBE, American-British investment banker and philanthropist * Sir David Walker, Chairman, Barclays PLC * Kevin Warsh, G.W. Bush economic advisor; Member, Federal Reserve Board of Governors

Notes

References

Chernow, Ron Ronald Chernow (; born March 3, 1949) is an American writer, journalist and biographer. He has written bestselling historical non-fiction biographies. He won the 2011 Pulitzer Prize for Biography and the 2011 American History Book Prize for his ...

(1990). ''The House of Morgan''. * Hibbard, J. (January 17, 2005). "Morgan Stanley: No stars—and lots of top tech IPOs". ''BusinessWeek'', 56–58.
John Mack Elected Chairman and CEO of Morgan Stanley
*

Partnoy, Frank Frank Partnoy is a Professor of Law at the University of California Berkeley School of Law. He was a George E. Barrett Professor of Law and Finance and the founding director of the Center on Corporate and Securities Law at the University of San Di ...

. ''F.I.A.S.C.O''. New York: Penguin Books, 1997.

External links

* {{Authority control 1935 establishments in New York City American companies established in 1935 Banks established in 1935 Companies based in Manhattan Companies listed on the New York Stock Exchange Financial services companies based in New York City Financial services companies established in 1935 House of Morgan Investment banks in the United States Mitsubishi UFJ Financial Group Multinational companies based in New York City Primary dealers Publicly traded companies based in New York City Subprime mortgage crisis Subprime mortgage lenders Systemically important financial institutions