Eight former Morgan Stanley executives on Monday stepped up their campaign to oust Chief Executive Philip Purcell, telling employees that management will try to intimidate them into supporting the current leadership of the securities firm.
"We know that current management is likely to tout the 'loyalty' of many employees," the group said in a letter to Morgan Stanley employees. "We also understand that many of you feel that there is an atmosphere of intimidation and fear at the firm, which restricts your ability to be heard."
The letter, published in a full-page advertisement in The Wall Street Journal, is the latest salvo in a public battle between Purcell and the former executives, who include former Chairman Parker Gilbert.
It was issued one day after the Independent on Sunday newspaper in London, citing unnamed sources, said HSBC Holdings Plc, one of the world's largest banks, was considering a 40 billion pound ($75 billion) bid for Morgan Stanley.
Investors have grown frustrated in the last several years as Morgan Stanley shares have lagged those of rivals. Some shareholders want the company to shed its Discover credit card, retail brokerage and asset management businesses.
Last week, Stephan Newhouse left the firm after being replaced as president by Zoe Cruz and Stephen Crawford. Other executives who left last week include institutional securities chief Vikram Pandit and institutional equities chief John Havens.
"I know that it was, in part, because of decisions I made that these men left the firm," Purcell said in a letter to employees, which was posted on The Wall Street Journal's Web site.
"But I believe — fervently — that these decisions are in the best long-term interests of each of you, our clients and our shareholders. I know that some of you are not quite as convinced."
A Morgan Stanley spokesman did not immediately return a call seeking to confirm the letter's contents.
Morgan Stanley shares rose $1.68, or 3 percent, to $58.55 in pre-market trading on the Inet electronic brokerage system.