On the surface, the open revolt by eight retired Morgan Stanley executives against the leadership of Philip Purcell seems to be a power struggle, pure and simple, over who should control that storied investment house.
In a larger sense, however, the attempted putsch may represent the final death rattle of a Wall Street era personified by the well-born, Ivy League-educated investment bankers who formed the core of Morgan Stanley during its heyday in the 1970s and 1980s.
Titans of their day, their impeccable bloodlines and easy society manners stood in direct contrast to the new breed of brooding, aloof Wall Street executives such as Purcell and E. Stanley O'Neal, the chief executive of Merrill Lynch and the first African-American to lead a Wall Street investment bank.
PHOTO: NY TIMES
Like Purcell, who merged his Dean Witter with Morgan Stanley in 1997, O'Neal is a Wall Street outsider. He experienced his own war with the entrenched elites at his firm when he declared an end to the notion of "Mother Merrill" as a clubby clique of brokers and bankers bent upon global expansion, regardless of the impact on the bottom line.
The eight retired Morgan Stanley executives rose to prominence when the firm was at Wall Street's epicenter. Such was its arrogance that until 1979 the firm would insist on being the exclusive underwriter on bond and equity deals.
Today, however, Morgan Stanley faces a drastically altered landscape, squeezed on both sides by large banks like Citigroup and nimbler, more downmarket institutions like Bear Stearns.
As Morgan Stanley's stock price and allure have sagged, the group of eight has lashed out at Purcell, blaming him for the merger's failure with a degree of personal animus that seems contrary to their beloved class codes of discretion and public politesse.
"It was a merger of patricians and plebeians, and the final irony was that the plebeians outwitted the patricians," said Ron Chernow, the author of The House of Morgan, a book that chronicles the rise of Morgan Stanley. "There is a feeling that Purcell desecrated the Morgan Stanley name. It's emotional for them and it goes beyond money: They gave Phil a Cadillac and got a Chevy in return."
In many ways, the essence of the divide between the Dean Witter and Morgan Stanley factions is captured by the contrasting personalities of Purcell, 61, and S. Parker Gilbert Jr., 71, chairman of Morgan Stanley from 1984 to 1990 and one of the leading spokesmen for the eight executives.
Born and raised in Salt Lake City, Purcell is a Notre Dame graduate who made his reputation by starting the Discover card from scratch while he was a senior executive at Sears in the mid-1980s. He has remained true to his Midwestern roots: Even after Dean Witter went public in 1993 and grew to be a major Wall Street firm, he would commute to his home in Winnetka, a suburb of Chicago, most weekends. He has been mostly invisible in New York's cultural scene. All of this seems to infuriate the advisory directors, who live either in the city or in suburbs like Greenwich, Connecticut, so much so that they mentioned his commutes in a letter they wrote to the board.
The Yale-educated Gilbert represents the counterpoint to Purcell. His father was an influential senior partner at J.P. Morgan during its heyday in the early 1900s, and in some ways Gilbert's rise to the top during the 1960s and 1970s seemed pre-ordained. He is a vice chairman of the Metropolitan Museum of Art, president of the J. Pierpont Morgan Library and in many ways a prototype of the discreet, well-connected banker who made the House of Morgan what it was.
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