Purcell Hopes Furor Abates

The Morgan Stanley chief says promotions led to bitterness.
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Phil Purcell's new team at

Morgan Stanley


stood stoically before critics Tuesday, acknowledging the media circus surrounding the investment bank and its potential to do harm.

At a midtown Manhattan analyst meeting, Purcell and his newly named co-presidents, Zoe Cruz and Stephen Crawford, stressed repeatedly their wish to get the bank off the business page.

"With investment banking, you want to be out of the paper every day," Purcell said in his first major public appearance since the controversy broke. "We are the first to admit that the media frenzy over recent events has been disruptive. The sooner we can move on and return our entire focus to the business, the better."

The media has been the primary forum in which a group of dissident shareholders has been waging a bitter war for Purcell's ouster over the last two months. Among other things, the dissidents have bristled at the elevation of Cruz and Crawford -- promotions Purcell defended on Tuesday.

"When you choose some people in a new management structure, you don't choose others, and in the process we lost some valued members of our management team," Purcell said. "We feel we've put the right people in place to execute well over the long term."

Morgan Stanley has seen a steady stream of high-level defections, including legendary investment banker Joseph Perella and several members of the executive committee. The departing executives have generally cited the company's lagging stock price and perceptions that Purcell lacks the vision to manage the bank's disparate assets.

In his comments Tuesday, Purcell tried to suggest the worst of the crisis is over.

"We have improved morale in the retail business since there were noises out in the public that we would divest retail," he said. "Businesses that we worry about the most are the equity businesses. We have lost some key leadership. We also lost traders. But I think we've made real good progress there."

"The way people feel about the firm's ability to serve their clients


investment banking, and that's where we in management have been spending an awful lot of time."

Purcell's new lieutenants echoed the CEO's commitment to putting the incident behind the firm with as little disruption as possible.

"We must keep the talent we have," said Cruz, while Crawford conceded, "We will have departures, but we can and will thrive in spite of the losses."