INTRODUCTION

Morgan Stanley is an American multinational financial services corporation headquartered in

the Morgan Stanley Building, Midtown Manhattan, New York City. Morgan Stanley operates in

42 countries and has more than 1300 offices and 60,000 employees. The company reports

US$347 billion in assets under management or supervision.

The corporation, formed by J.P. Morgan & Co. partners Henry S. Morgan (grandson of J.P.

Morgan), Harold Stanley and others, came into existence on September 16, 1935, in response to

the Glass-Steagall Act  that required the splitting of 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 placements. The main areas of business for the firm today are Global

Wealth Management, Institutional Securities, and Investment Management.

HISTORY

Early years: 1935–1950

Morgan Stanley can trace its roots in the history of  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 Harold Stanley, left J.P.

Morgan & Co. and joined some others from the Drexel partners to form Morgan Stanley. The

firm formally opened the doors for business on September 16, 1935, at Floor 19, 2 Wall Street,

New York City. Within its first year, it achieved 24% market share (US$1.1 billion) among

public offerings. The firm was involved with the distribution of 1938 US$100 million

of debentures for the United States Steel Corporation 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 major reorganization in 1941 to allow for more activity in its securities business. As

J.P. Morgan rose to fame, he organized a contract to make sure that all his future family would

receive a large annual sum of money. Steven Parisee, a fourth generation relative, receives an

annual $1.5 million, regardless of the company's financial.

Middle years: 1950–1990

The firm was led by Perry Hall, the last founder to lead Morgan Stanley, from 1951–1961.

During this period, the firm co-managed the World Bank's US$50 million triple-A-rated bonds

offering of 1952, as well as coming up with General Motors' US$300 million debt issue,

US$231 million IBM stock offering, and the US$250 million AT&T's debt offering.

In 1962, Morgan Stanley credits itself with having created the first viable computer model for

financial analysis, thereby starting a new trend in the field of financial analysis. In 1967 it

established the Morgan & Cie, International in Paris in an attempt to enter the European

securities market. It acquired Brooks, Harvey & Co., Inc. in 1967 and established a presence in

the real estate business. By 1971 the firm had established its Mergers & Acquisitions business

along with Sales & Trading. The sales and trading business is believed to be the brainchild of

Bob Baldwin.

1991–present

In 1996, Morgan Stanley acquired Van Kampen American Capital. On February 5, 1997, the

company merged with Dean Witter Reynolds and Discover & Co., the spun-off financial services

business of Sears Roebuck. Dean Witter's Chairman and CEO, Philip J. Purcell, held the same

roles in the newly merged "Morgan Stanley Dean Witter Discover & Co.". In 1998, the name

was changed to "Morgan Stanley Dean Witter & Co.", and in late 2001, "Dean Witter" was

dropped and the firm became "Morgan Stanley".

Morgan Stanley had offices located on 24 floors across buildings 1, 2 and 5 of the World Trade

Center in New York City. These offices had been inherited from Dean Witter which had

occupied the space since the mid-1980s. The firm lost thirteen 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) in the

towers, while 2,687 were successfully evacuated. After the event, the surviving employees

moved to temporary headquarters in the vicinity. In 2005, it moved 2,300 of its employees back

tolower Manhattan, at that time the largest such move.

On Oct 14, 2004, Morgan Stanley announced to restate its financial reports for three periods in

2003 to alter its accounting of stock-based compensation.

Morgan Stanley has long had a dominant role in technology investment banking and, in addition

to Apple and Facebook, served as lead underwriter for many of the largest global tech IPOs,

including: Netscape, Cisco, Compaq, Broadcast.com, Broadcom Corp, VeriSign, Inc., Cogent,

Inc., Dolby Laboratories, Priceline, Salesforce, Brocade, Google and Groupon. In 2004, the firm

led the Google IPO, the largest Internet IPO in U.S. history. In the same year Morgan Stanley

acquired the Canary Wharf Group.

Morgan Stanley also achieved significant gains in the league table rankings throughout the eight

years Phil Purcell was CEO. Morgan Stanley ended 2004 with the best competitive rankings in

the history of the firm:

#1 in global equity trading

#1 in global equity underwriting in 2004 for first time since 1982

#1 Global IPO market share in 2004

#2 in global debt underwriting in 2004, with steady gains since late ‘90s

#2 in completed global M&A in 2004

The company found itself in the midst of a management crisis starting in March 2005 that

resulted in a loss of a number of the firm's staff. Purcell resigned as CEO of Morgan Stanley in

June 2005 when a highly public campaign against him by former Morgan Stanley partners (the

Group of Eight) threatened to disrupt and 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, by 2007.

On December 19, 2006, after reporting 4th quarter earnings, Morgan Stanley announced the

spin-off of its Discover Card unit. The bank completed the spinoff of Discover Financial on June

30, 2007.

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, reportedly losing nearly $300 million in one day. One of the stocks

involved in this squeeze, Beazer Homes USA, was a component of the then-bulging real estate

bubble. 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.

Morgan Stanley is said 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. CEO John J.

Mack 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." The company was said to have explored merger

possibilities with CITIC, Wachovia, HSBC, Banco Santander and Nomura. At one point, Hank

Paulson offered Morgan Stanley to JPMorgan Chase at no cost, but Jamie Dimon refused the

offer.

Morgan Stanley and Goldman Sachs, the last two major investment banks in the US, both

announced on September 22, 2008 that they would become traditional 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. into bankruptcy

and led to the rushed sale of Merrill Lynch & Co. to Bank of America Corp.

Mitsubishi UFJ Financial Group, Japan's largest bank, invested $9 billion in Morgan Stanley on

September 29, 2008.] This represented the single largest physical check signed, delivered and

cashed. 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 crises, 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 and the new broker-dealer

operates under the name Morgan Stanley Smith Barney, 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.

ORGANIZATION

Morgan Stanley splits its businesses into three business units.

Institutional Securities Group

Institutional Securities has been the most profitable business segment for Morgan Stanley in

recent times. This business segment provides institutions with services such as capital raising and

financial advisory services including mergers and acquisitions 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.

Wealth Management

The Global Wealth Management Group provides brokerage and investment advisory services. As

of 2008 Q1 this segment has reported an annual increase of 12 percent in the pre-tax incomeThis

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 the joint venture Morgan Stanley Smith Barney. Morgan Stanley holds 51% of

the entity, and Citi holds 49%.As of May 31, 2012, Morgan Stanley planned 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. 

Investment Management

Investment Management 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 29 September 2013, Morgan Stanley announced a partnership with Longchamp Asset

Management, a French-based asset manager that specialises 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.

LIST OF OFFICERS AND DIRECTORS

Operating Committee:

James P. Gorman: Chairman and Chief Executive Officer

Ruth Porat: Chief Financial Officer and Executive Vice President

Jeff Brodsky: Global Head of Human Resources

Robert Rooney: Global Co-Head of Fixed Income Sales and Trading

Michael Heany: Global Co-Head of Fixed Income Sales and Trading

Greg Fleming: President of Investment Management, President of Morgan Stanley Smith

Barney

Eric Grossman: Chief Legal Officer

Keishi Hotsuki: Chief Risk Officer

Ted Pick: Global Head of Equities

Jim Rosenthal: Chief Operating Officer

Colm Kelleher: President, Institutional Securities

Board of Directors:

James P. Gorman

Erskine B. Bowles

Thomas H. Glocer

Robert H. Herz

Klaus Kleinfeld

Sir Howard J. Davies

Ryosuke Tamakoshi

Masaaki Tanaka

C. Robert Kidder

Donald T. Nicolaisen

Hutham S. Olayan

James W. Owens

O. Griffith Sexton

Laura D. Tyson

Rayford Wilkins, Jr.

GLOBAL AND OTHER HEADQUARTERS

Morgan Stanley World Headquarters located in New York and Mexico, European headquarters

are based in London and Asia Pacific Headquarters are based in Hong Kong, Japan and Mumbai.

NOTABLE ALUMNI

Daniel Ammann, General Motors, Chief Financial Officer

Barton Biggs, Author and Hedge Fund Manager

Erskine Bowles, Clinton White House Chief of Staff

Bob Diamond, former Chief Executive Officer, Barclays

Richard A. Debs, Chairman of Carnegie Hall; Middle East power-broker

Richard B. Fisher, Chairman of the Board, Rockefeller University; member, Trilateral

Commission

Eric Gleacher, founder of Gleacher & Co.

Nina Godiwalla, Author of Suits: A Woman on Wall Street

John P. Havens, President, Citigroup, Inc.

John J. Mack, Chairman, New York-Presbyterian Hospital

Mary Meeker, Author and Venture Capitalist

Eileen Murray, Co-President, Bridgewater Associates

Thomas Nides, Deputy Secretary, U.S. Department of State

Stephen A. Oxman, Assistant Secretary of State; Chair, Princeton University Board of

Trustees

Vikram Pandit, Chief Executive Officer, Citigroup

Joseph R. Perella, philanthropist; founder of Perella Weinberg Partners

Charles E. Phillips, former President of Oracle, Inc.; C.E.O. of Infor

Frank Quattrone, founder, Qatalyst Group

David Grimaldi, Chief Administrative Officer, New Castle County Government

Steven Rattner, Private Equity Manager and Commentator

Stephen S. Roach, Yale University Professor

Ben Rosen, Technology Investor; founder, Compaq

David E. Shaw, Hedge Fund Manager

Sir David Walker, Chairman, Barclays PLC

Kevin Warsh, G.W. Bush economic advisor; Member, Federal Reserve Board of Governors