Cuts are expected to go down in Asia. (Update: and elsewhere!) Read more »
They were willing to ‘em a chance, but no more. Read more »
- Investment bankers wanted to win underwriting business.
- They realized that having their research analysts shout “BUY BUY BUY!” about every company they underwrote would help to win this business.
- So they went to their analysts and were all “do that.”
- The analysts, for cost-center and spinelessness reasons, did.
- But in classic passive-aggressive fashion they sent each other emails to the effect of “oh, man, my fingers were totally crossed when I issued that Buy recommendation, that company is dogshit.”1
- It was dogshit, and investors lost money buying those Buys.
This problem was solved via a Global Research Settlement among a bunch of banks, a bunch of state attorneys general, and the SEC. The settlement had various technical provisions around who could talk to whom about what when, but the gist of it was “yo, bankers, stop telling your analysts to talk up shitty stocks.”
You can understand why Morgan Stanley banker Michael Grimes2 would not think that he violated this settlement when he (1) learned that the Facebook underwriting syndicate’s research analysts (including Morgan Stanley’s) had estimates for Facebook’s 2Q2012 revenue were higher than what Facebook expected, (2) told Facebook something to the effect of “hey, it would look really bad if you did an IPO based on misleadingly high revenue estimates, you should guide the analysts lower,” and (3) sat with Facebook’s Treasurer in a hotel room while she did that.
For the last year or so, Morgan Stanley CEO James Gorman has sent a simple message to employees grumbling about compensation: STFU or GTFO. Now, according to Charles Gasparino, the bank may be telling a few employees to GTFO regardless of whether or not they’ve been bitching about pay. Read more »
If you’re looking for a cheerleader, go bark up another tree.
“Say you want to be out ahead of it and give a lot of speeches and talk about all the good we’re doing,” Gorman said today at an industry conference in New York. “And then some trader does some stupid thing like this guy at UBS did and he’s in jail and all bets are off,” Gorman said. He was referring to Kweku Adoboli, the UBS AG trader convicted of fraud this month in the largest unauthorized trading loss in British history…Traders at New York-based Morgan Stanley had too much latitude in the past, “what I call having an outsized sandbox,” Gorman, 54, said at the conference, which was sponsored by the Securities Industry and Financial Markets Association. “Until we can be really confident we’ve got discipline around the sandboxes, I think you have to be really careful not to be holier than thou,” Gorman said. “We’re going to be in the doghouse for a while.”
Guy Who Was Fired By Goldman Sachs For Amassing “Inappropriately Large” Position Welcomed With Open Arms At Morgan StanleyBy Bess Levin
Back in December 2007, things weren’t going so well for Matthew Marshall Taylor. He’d just been fired from Goldman Sachs and not only was he out of a job, but his prospects for finding a new one didn’t look so hot, on account of the fact that Goldman planned to put a note in his file detailing the reason he’d been let go– “for building an ‘inappropriately large’ proprietary trading position”– and it seemed unlikely anyone at the firm would be open to serving as a reference for him moving forward. Three months later, however, one bank told MMT that there was room for him at their inn. Morgan Stanley, apparently having decided the incident at Goldman was but an asterisk in what would be a long and fruitful career, told Taylor to come on down, employing him for over four years until he left in July of his own accord and not because of any legal issues relating to his work at Goldman Sachs. Read more »