MS Mess Mgt Shuffle EEOC Age Discrimination

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Nov 30, 2007 4:35 pm

MS is all mess up again. Management shuffles, more write off’s comming, EEOC Age Discriminations probe. Where will it ever end?

Dec 3, 2007 7:09 pm

Morgan Stanley is dogged by a long and sordid history of allegations that it routinely engages in illegal employment discrimination and other violations of the law.  Morgan Stanley paid $54 million to settle a sex discrimination lawsuit in 2004 and $1 million to settle a race discrimination lawsuit. This year Morgan Stanley paid millions to settle two gender and race suits. Millions more will be paid in the age discrimination case and billions will be lost on thier taking on more risk with the CDO’s.

Dec 3, 2007 10:12 pm

Every firm has their share of problems -MS, ML, EDJ, UBS, AGE, etc…doesn’t matter. Half the problems you read about are actually INDUSTRY problems, not just firm specific - it’s just that usually with each lawsuit, one or two key firms are targeted.

Dec 4, 2007 9:57 am

A lot of those problems aren’t just our industry.  Lawyers know no bounds when it comes to making a buck.  Anytime a big company with deep pockets and a legal fund exists there are going to be lawsuits.  Too many greedy people out there that think they deserve something for nothing.  Couple that with a bunch of lawyers who have no moral convictions and you have a recipe for disaster. 

Dec 4, 2007 10:06 am

Wasn't forge1 the guy who claimed it was age discrimination and not under-performance that caused MS to let him go a couple of years back? I don’t know how someone who’s over LOS 11 and doing under $225k can show his face at the office, much less whine about it when he’s let go….

Dec 6, 2007 10:11 am

MS is all mess up again. Management shuffles, more write off’s comming, EEOC Age Discriminations probe. Where will it ever end?

  Yeah, sounds like the wheels have really come off since they let you go......  

After years of trailing competitors in key metrics such as average broker revenue and return on average equity, Morgan Stanley, the second-largest brokerage firm by market value, finally has the numbers to make it competitive among its peers.

In the quarter ended Aug. 31, Morgan Stanley's global wealth management group contributed a fifth of the bank's total revenue. It posted a pretax profit margin of 17 percent and return on equity of 39 percent. That's in stark contrast to results for the quarter ended Nov. 30, 2005, the last full quarter before Gorman took over in February 2006. At that time, the pretax profit margin was 7 percent, and the return on average common equity was 9 percent.

In comparison, for the quarter ended Sept. 28, Merrill Lynch's global wealth management business — which includes Wall Street's biggest brokerage network with 16,610 financial advisers and Merrill's stake in asset manager BlackRock Inc. — had a profit margin of 26.9 percent.

True, Gorman has cut the firm's broker count to 8,340 as of the end of August from 9,526 the quarter before he took over, but annualized revenue per global representative has jumped to $817,000 from $551,000.

Part of the improvement came from cutting 10 percent of the lowest producing advisers and accounts, as ''smaller accounts generate a lot more legal and administration costs,'' said Camilla Peterson, an analyst at Atlantic Equities.

According to Morgan Stanley, the amount of assets in $1 million-plus accounts rose 22 percent from the year-ago third quarter, and assets below $100,000 fell 14 percent during that period.

The firm also moved more client assets into fee-based accounts instead of transaction-based accounts. Those accounts generate steady revenue regardless of how much trading occurs. Morgan Stanley has about 30 percent of its assets in fee-based accounts, and Peterson said the firm should aim for 35 percent.

The brokerage force shed its blue-collar Dean Witter image and embraced the white-shoe investment bank's name, expanding its global wealth management platform and technology offerings.