With investment banks forced to write down some £40 billion of losses, more top executives are getting the axe as Wall Street moves to shore up its damaged image.
The latest executive to fall was Morgan Stanley's Zoe Cruz, a 25-year veteran at the firm and one of the most powerful women in the financial world.
Cruz was ousted as co-president yesterday in a sweeping management shake-up aimed at turning around the company.
Cruz joins a growing list of Wall Street's top names who have been fired since the summer, including Merrill Lynch & Co.'s Stan O'Neal and Citigroup Inc.'s Charles Prince, for presiding over firms that became mired in the subprime mortgage tar-pit.
More to come?
Online brokerage E-Trade Financial Corp. also said yesterday CEO Mitch Caplan would step down from his position, and there continues to be speculation that Bear Stearns head James Cayne will be forced to retire early.
"The captains are going down with the ship, whether they are rising stars or not doesn't matter," said David Easthope, a senior analyst at business consulting group Celent. "The losses are so large and embarrassing to the organization that they are getting rid of people to satisfy the public perception that they are fixing things."
A Morgan Stanley spokesman declined to comment beyond the company's statement.
The company is expected to report fourth-quarter earnings in mid-December. Analysts predict it will report a profit of two cents per share on £3 billion of revenue.
Morgan Stanley shares are down about 23 percent so far this year, as investors have sold off Wall Street institutions that have been slammed by credit problems.
Shares closed down $1.16, or 2.2 percent, to $52.34 yesterday.
November 30, 2007