Ex-Morgan Stanley Chief Jams Foot in Mouth, Complains of CEO Abuse

There's a ton of interesting stuff going on in the Wall Street sphere of late – I'm trying to find some time to do a proper write-up of the extraordinary lawsuit just filed by the Better Markets advocacy group against Eric Holder's Justice Department, seeking to invalidate the $13 billion JP Morgan Chase settlement – but one particular thing happened this week that just can't go by without comment.

John Mack, the former CEO of Morgan Stanley and one of the more irritatingly unrepentant dickheads of the crisis era, gave an incredible interview to Bloomberg TV. In a discussion about executive pay, Mack said we're all being too rough on his fellow too-big-to-fail bank CEOs.

He would love, he said, "to see people stop beating up on Lloyd and Jamie," endearingly referring to Goldman chief Lloyd Blankfein and Chase chief Jamie Dimon by their first names (Mack must be in a bowling league with both men). He added: "I think that would make a lot of sense, and I'm in favor of that."

Morgan Stanley To Pay $4.8 Million To Settle Price-Fixing Charges That Cost New Yorkers $300 Million

Aug 7 (Reuters) - A federal judge grudgingly approved Morgan Stanley's $4.8 million settlement of electricity price-fixing charges over activity estimated to have cost New York consumers about $300 million, turning aside claims by a major nonprofit that the accord let the bank off too easily.

The case, which also involved the electricity generator KeySpan Corp, was the first in which the U.S. Department of Justice said it tried to recover improper profit from a financial services company that used derivatives to foster anticompetitive behavior.

James Gorman, Morgan Stanley CEO, Defends Bank's Handling Of Facebook IPO

The chief of the bank that some say had a hand in botching Facebook's IPO isn't apologizing for anything.

James Gorman, chairman and CEO of Morgan Stanley, the bank that was the lead underwriter for Facebook's IPO, said in a meeting on Tuesday that Morgan Stanley worked "100 percent within the rules," the Wall Street Journal reports.

He said that though it was "disappointing" that Facebook's stock price has plunged since the IPO, "speculation of nefarious activity" during the preparation for the IPO was false, according to the WSJ. He said he was not "aware of any dissent" about Facebook's steep IPO price among the banks that underwrote Facebook's IPO.

Goldman Sachs Faces Mortgage Debt Class-Action Lawsuit Over Misleading Investors

Feb 3 (Reuters) - Goldman Sachs Group Inc was ordered by a federal judge to face a securities class-action lawsuit accusing it of misleading investors about a 2006 offering of securities backed by risky mortgage loans from a now-defunct lender.

U.S. District Judge Harold Baer in Manhattan certified a class-action lawsuit by investors in the GSAMP Trust 2006-S2, a $698 million offering of certificates based on a pool of second-lien home mortgages.

The underlying loans were made by New Century Financial Corp, a subprime mortgage specialist that went bankrupt in 2007.

Plaintiffs in the lawsuit said New Century ignored its own underwriting standards and used improper appraisals when making the loans, and Goldman failed to conduct adequate due diligence when it bought the loans and packaged them into securities.

Baer's decision is dated Feb. 2. (Reporting By Jonathan Stempel; Editing by Phil Berlowitz)

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Source: Huff 
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Morgan Stanley CEO To Disgruntled Employees: 'If You're Really Unhappy, Just Leave'

The CEO of one of the country's largest investment banks has some choice words for any employees upset about the prospect of a smaller paycheck this year.

James Gorman, the head of Morgan Stanley, said that if his workers are so angry about their latest, trimmed-down paycheck, it's probably time for them to go. Gorman stands in contrast with many of his executive counterparts, who have largely stayed silent on the issue of declining compensation, despite an industry-wide restructuring.

"I say [to disgruntled Morgan Stanley employees], listen, you're naive, read the newspaper, number one," Gorman said in an interview with Bloomberg Television. "Number two, if you put your compensation in a one year context to define your overall level of happiness, you've got a problem that is bigger than the job. And number three, if you're really unhappy, just leave. Life's too short."

Morgan Stanley announced earlier this month that it would cap cash bonuses for 2011 at $125,000 and that its executives -- including Gorman -- wouldn't be getting any cash bonuses, according to The New York Times.

Gorman and his employees at Morgan Stanley aren't the only ones on Wall Street contending with smaller paychecks. Anxiety over the state of the global economy, slow dealmaking and a boost in public anger over the financial industry's high pay have likely pushed firms to slash their compensation pools to the lowest level since the 2008 financial crisis, the Wall Street Journal reports.

And that's for those that've kept their jobs. All told, Wall Street laid off more than 200,000 employees in 2011 alone.

"The world has changed and the banking industry has gone through a fundamental change and we have to readjust," Gorman said in the interview.

Many workers have had trouble coming to terms with the new reality. Bonus day at Goldman Sachs last week was a "bloodbath," one mid-level employee told CNBC, as some workers learned they would be taking home smaller bonuses this year -- and some none at all. In addition, the firm cut the pay of some if its senior workers in half.

Investment bankers at Bank of America also found out earlier this week that their compensation would be slashed by 25 percent. That's part of a larger push to cut total costs at America's second-largest bank by as much as $8 billion per year.

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Source: Huff  
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