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Friday April 22, 10:25
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Katz enters public game around Morgan Stanley
(by Helen Snow)
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David Katz, chief investment officer of New York- based Matrix Asset Management, which holds 1.2 million Morgan Stanley shares worth about $60 million, published a letter yesterday urging Morgan Stanley’s board to take necessary measures to settle the issue around the management crisis at the second-biggest U.S. securities firm.
``Doing nothing is myopic and becoming downright negligent,’’ a top-shareholder said. ``You need to act now.’’
The battling process started once by Morgan Stanley CEO Philip Purcell when he dismissed two top executives turned into new quitting stage. Five of the 14-member management committee have quit since a March 28 shake-up. Eight officers of the firm’s cash equity trading desk deserted yesterday to Deutsche Bank AG.
Previously, on April 14, Katz wrote a letter to the board prompting directors to stop desertions that he said endanger the value of the firm.
Katz published both letters yesterday, blaming the board for allowing a ``brain drain’’ that ``emboldens your competitors.’’
Investors showed a prompt reaction to the events as Morgan Stanley shares dropped $1.54, or 3%, to $50.19 in composite trading in New York yesterday. The stock is reported to have lost a third of its value in the past five years.
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