As many as nine employees from Morgan Stanley’s trading unit are leaving the company en masse to go to a competitor, The Associated Press confirmed Friday.
According to two sources close to the company, who spoke on condition of anonymity, three managing directors and up to six others have left the company’s equity derviatives desk, which handles trading in options and futures contracts and works closely with hedge funds and big institutional investors.
Company spokeswoman Melissa Stonberg would not confirm the departures, but said it was “disappointing” whenever an employee leaves the company. She said Morgan Stanley would continue moving forward in an area in which the company sees strong potential.
Morgan Stanley Chief Executive Phil Purcell, in a recent speech to analysts, highlighted the derivatives group as one of the company’s strengths.
Business news channel CNBC initially reported the departures Friday afternoon, saying that as many as 12 employees were leaving the company for Wachovia Securities. A spokeswoman for Wachovia did not immediately return a call from The AP seeking comment.
Morgan Stanley has faced a steady stream of departures since late March, when the promotion of co-presidents Zoe Cruz and Stephen Crawford angered a handful of long-time executives. Since then, five of the 14 members of the company’s executive committee have left, along with a number of other managers, mostly in Morgan Stanley’s stock trading and institutional banking businesses.
The string of departures emboldened a group of eight disgruntled shareholders and former executives who have called for Purcell’s firing and proposed an alternate management team for the company. Their ideas were rejected by Morgan Stanley’s board of directors, which gave Purcell a vote of confidence at a meeting April 30.