Things Rockier at Morgan Stanley
Under pressure from large investors to specify their plans for Morgan Stanley's future, eight retired dissident executives of the firm proposed yesterday that one of their own, Robert G. Scott, immediately replace Phil Purcell as CEO. The unexpected move, coming a day after the firm's abrupt proposal to spin off the
Discover credit card unit highlights how
shitty disastrous things are at the venerable investment bank. The ouster of Mr. Purcell began brewing last week with the sudden resignation of two popular senior executives whose take on Purcell was portrayed by the media as a dangerous insurgency. Now they have put forward Mr. Scott, who is a well-regarded former president of the firm but was
never considered chief executive material before or after the 1997 merger with Dean Witter. Wall St really didn't appreciate the gesture --
Lehman Brothers downgraded Morgan Stanley's shares to underweight -- the lowest possible rating -- saying that the spinoff, combined with the possibility that Mr. Purcell might survive the current debacle, would further propel the shares downward. As what will happen -- nobody knows - but even with the Board behind Purcell, a new CEO may have to be called in
simply to quell matters. Wall Street HATES uncertainty.
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