Reply #37: Morgan Stanley's Perella Will Quit, Meguid May Follow [View All]

[54anickel]

http://quote.bloomberg.com/apps/news?pid=10000006&sid=a935UzLcnNP8&refer=home

April 13 (Bloomberg) -- Joseph Perella, Morgan Stanley's top investment banker, plans to resign, as the exodus of senior managers from the world's No. 2 securities firm gathers pace.

Perella, 63, is in the process of leaving the New York-based firm, two weeks after Chief Executive Officer Philip Purcell shook up management by replacing President Stephan Newhouse, according to his personal spokesman, Tim Metz. The Wall Street Journal reported that Terry Meguid, 49, head of investment banking, also plans to resign. Morgan Stanley spokesman Mark Lake declined to comment.

``It's a horrendous problem,'' said William Calvert, who helps manage about $8 billion in assets at Framlington Group Plc in London. ``Perella is a big name -- the whole prestige of the business, the whole credibility of the business takes a knock.'' Perella ranks among the biggest rainmakers on Wall Street, having led the investment-banking departments at three firms over the past two decades. Purcell, 61, named Perella vice chairman on March 29, seeking to shore up support after Newhouse's demotion prompted the departures of Vikram Pandit, 48, who oversaw sales and trading and investment banking, and John Havens, 48, head of equities.

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Firm Roiled

As the departures roil Morgan Stanley internally, eight of the firm's former leaders are trying to oust Purcell because they say his mismanagement has led the stock to lag behind rivals such as Goldman Sachs Group Inc. The group, led by ex-President Robert Scott, already forced Purcell to announce a possible spinoff of the firm's Discover credit-card business.

Shareholders led by the Council of Institutional Investors, which represents 140 U.S. pension plans, are seeking meetings with Purcell and the former executives to discuss the management changes and turmoil at the firm.

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