Dec 1, 2007

Zoe Cruz exits Morgan Stanley

Morgan Stanley on 29 November declared a number of management changes effective December 1, 2007. Zoe Cruz was shown the way out after 25 years at Morgan Stanley. She was one of the top 10 most powerful business women in 2007 according to Forbes.

Zoe Cruz's role as co-president of Morgan Stanley came to an end because of ongoing subprime crisis which claimed more than 3 billion dollars for the company. Walid A. Chammah and James P. Gorman have been named as co-presidents of the firm.

Morgan Stanley will announce its fourth quarter results around December 17, 2007. Skeptics feel that the ouster of Cruz before the results signals some more writedowns in the results. The New YorkTimes reported that the move represents a sharp reversal for Morgan’s chief executive, John J. Mack, who had supported and cultivated her career.

A report on cnn.money.com quoted Richard Bove( an analyst at Punk Ziegel):
"This must mean that Morgan Stanley is going to report write-downs much greater than previously suggested,"

Chairman and CEO John Mack said:
“Throughout her 25 years of distinguished service, Zoe has always demonstrated a deep commitment to Morgan Stanley. She has helped to build some of our most important and successful businesses and worked tirelessly to strengthen and grow our global franchise. We greatly appreciate the enormous contributions Zoe has made in a wide variety of roles, and we are confident that she will continue to do great things in the years ahead.”

Bloomberg reported that Morgan Stanley has taken bigger trading risks and expanded its mortgage securities business under the leadership of Mack. Mack joined in mid-2005 after former CEO Philip Purcell was forced to resign due to investor’s discontent.

Morgan Stanley is a leading global financial services providing firm. For further information about Morgan Stanley, please visit www.morganstanley.com.

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