Early years (1935–1997) Morgan Stanley traces its roots to
J.P. Morgan & Co. After the
U.S. Congress passed the
Glass–Steagall Act in 1933, it was no longer possible for a corporation to have investment banking and
commercial banking businesses under a single holding entity. J.P. Morgan & Co. chose the commercial banking business over the investment banking business. As a result, some of the employees of J.P. Morgan & Co., most notably
Henry S. Morgan (grandson of
J. P. Morgan) and
Harold Stanley, left J.P. Morgan & Co. and joined others from the Drexel partners to form Morgan Stanley. The firm was involved with the distribution of 1938 US$100 million (~$ in ) of
debentures for the
United States Steel Corporation as the lead
underwriter. The firm also obtained the distinction of being the lead syndicate in the 1939 U.S. rail financing. The firm went through a reorganization in 1941 to allow for more activity in its securities business. The firm was led by Perry Hall, the last founder to lead Morgan Stanley, from 1951 until 1961. During this period, the firm co-managed the World Bank's triple-A-rated bonds offering of 1952, as well as coming up with
General Motors' US$300 million debt issue, US$231 million
IBM stock offering, and the US$250 million
AT&T's debt offering. Morgan Stanley credits itself with having created the first viable computer model for financial analysis in 1962, thereby starting a new trend in the field of financial analysis. Future president and chairman Dick Fisher contributed to the computer model as a young employee, learning the
Fortran and
COBOL programming languages at
IBM. In 1967, it established the Morgan & Cie, International in Paris in an attempt to enter the European securities market. The firm acquired Brooks, Harvey & Co., Inc. in 1967 and established a presence in the real estate business. The sales and trading business is believed to be the brainchild of Bob Baldwin. In 1996, Morgan Stanley acquired
Van Kampen American Capital.
After the merger (since 1997) On February 5, 1997, the company merged with
Dean Witter Discover & Co., the spun-off financial services business of
Sears Roebuck. Dean Witter's chairman and CEO,
Philip J. Purcell, continued to hold the same roles in the newly merged "Morgan Stanley Dean Witter Discover & Co." Morgan Stanley's president John J. Mack became the firm's president and chief operating officer. In 1998, the name of the firm was changed to "Morgan Stanley Dean Witter & Co." Originally, the name was chosen to be the combination of the two predecessor companies to avoid tension between the two firms. Morgan Stanley had offices located on 35 floors across buildings 1, 2, and 5 of the
World Trade Center, and was the largest tenant of the WTC complex. Most of these offices had been inherited from Dean Witter which had occupied the space since the mid-1980s. The firm lost 13 employees during the
September 11 attacks in 2001 (Thomas F. Swift, Wesley Mercer, Jennifer de Jesus, Joseph DiPilato, Nolbert Salomon, Godwin Forde, Steve R. Strauss, Lindsay C. Herkness, Albert Joseph, Jorge Velazquez, Titus Davidson, Charles Laurencin and Security Director
Rick Rescorla) in the towers, while 2,687 were successfully evacuated by Rick Rescorla. The surviving employees moved to temporary headquarters in the vicinity. In 2005 Morgan Stanley moved 2,300 of its employees back to
lower Manhattan, at that time the largest such move. In 2003,
New York–Presbyterian Hospital named the
Morgan Stanley Children's Hospital in recognition of the firm's sponsorship of the hospital, which largely funded its construction through philanthropy. The initiative began under CEO
Philip J. Purcell and was completed under
John Mack. Employees at the firm have been involved with the hospital since the 1990s and personally donated to the construction of the current child-friendly building, which opened in November 2003. The company found itself in the midst of a management crisis starting in March 2005 that resulted in a loss of the firm's staff. Purcell resigned as CEO of Morgan Stanley in June 2005 when a highly public campaign by former Morgan Stanley partners threatened to damage the firm and challenged his refusal to aggressively increase leverage, increase risk, enter the sub-prime mortgage business and make expensive acquisitions; the same strategies that forced Morgan Stanley into massive write-downs, related to the
subprime mortgage crisis, by 2007. On December 19, 2006, Morgan Stanley announced the spin-off of its
Discover Card unit. The bank completed the spinoff of Discover Financial on June 30, 2007. In February 2007, Morgan Stanley announced the end of its Indian joint venture: the bank acquired its local partner's stake in the institutional brokerage business, and sold its own stake in the other businesses. The bank then set up a wholly owned subsidiary; the country head of Investment Management, Narayan Ramachandran, became CEO of the new subsidiary.
Aisha de Sequeira, a managing director in the Mergers and Acquisitions group, was made Head of Investment Banking. To cope with the write-downs during the subprime mortgage crisis, Morgan Stanley announced on December 19, 2007, that it would receive a US$5 billion capital infusion from the
China Investment Corporation in exchange for securities that would be convertible to 9.9% of its shares in 2010. The bank's Process Driven Trading unit was among several on Wall Street caught in a
short squeeze, reportedly losing nearly $300 million in one day. The bubble's subsequent collapse was considered to be a central component of the
2008 financial crisis. The bank was contracted by the
United States Treasury in August 2008 to advise the government on potential rescue strategies for
Fannie Mae and
Freddie Mac. Within days, Morgan Stanley itself was at risk of failure, with rapidly changing prospects, regulatory model and ownership stakes over the course of four weeks from mid-September to mid-October 2008. The bank Morgan Stanley was reported to have lost over 80% of its market value during the
2008 financial crisis. On September 17, 2008, the British evening-news analysis program
Newsnight reported that Morgan Stanley was facing difficulties after a 42% slide in its share price in two days. CEO
John J. Mack wrote in a memo to staff "we're in the midst of a market controlled by fear and rumours and
short-sellers are driving our stock down." By September 19, 2008, the share price had slid 57% in four days, and the company was said to have explored merger possibilities with
CITIC,
Wachovia,
HSBC,
Standard Chartered,
Banco Santander and
Nomura. At one point,
Hank Paulson offered Morgan Stanley to
JPMorgan Chase at no cost, but JPMorgan's
Jamie Dimon refused the offer. Morgan Stanley and
Goldman Sachs, the last two major investment banks in the US, both announced on September 22, 2008, that they would become traditional
bank holding companies regulated by the
Federal Reserve. The Federal Reserve's approval of their bid to become banks ended the ascendancy of securities firms, 75 years after Congress separated them from deposit-taking lenders, and capped weeks of chaos that sent
Lehman Brothers Holdings Inc. into bankruptcy and led to the rushed sale of
Merrill Lynch & Co. to
Bank of America Corp. MUFG Bank, Japan's largest bank, invested $9 billion in a direct purchase of a 21% ownership stake in Morgan Stanley on September 29, 2008. The payment from MUFG was supposed to be wired electronically; however, because it needed to be made on an emergency basis on
Columbus Day when banks were closed in the US, MUFG cut a US$9 billion physical
check, the largest amount written via physical check at the time. The physical check was accepted by
Robert A. Kindler, Global Head of Mergers and Acquisitions and Vice Chairman of Morgan Stanley, at the offices of
Wachtell Lipton. Concerns over the completion of the Mitsubishi deal during the October 2008 stock market volatility caused a dramatic fall in Morgan Stanley's stock price to levels last seen in 1994. It recovered once Mitsubishi UFJ's 21% stake in Morgan Stanley was completed on October 14, 2008. Morgan Stanley borrowed $107.3 billion from the Fed during the 2008 crisis, the most of any bank, according to data compiled by Bloomberg News Service and published August 22, 2011. In 2009, Morgan Stanley purchased
Smith Barney from
Citigroup and the new broker-dealer operates under the name
Morgan Stanley Smith Barney, the largest wealth management business in the world. In November 2013, Morgan Stanley announced that it would invest $1 billion (~$ in ) to help improve affordable housing as part of a wider push to encourage investment in efforts that aid economic, social and environmental sustainability. In July 2014, Morgan Stanley's Asian private equity arm announced it had raised around $1.7 billion (~$ in ) for its fourth fund in the area. In December 2015, it was reported that Morgan Stanley would be cutting around 25 percent of its fixed income jobs before month end. In January 2016, the company reported that it had offices in "more than" 43 countries. In October 2020, the company completed its acquisition of
E*Trade, a deal announced in February 2020 for $13 billion, the biggest acquisition by a U.S. bank since the
2008 financial crisis. In March 2021, Morgan Stanley completed its acquisition of
Eaton Vance, a deal announced in October 2020. With the addition of Eaton Vance, Morgan Stanley now had $5.4 trillion of client assets across its Wealth Management and Investment Management segments. The firm conducted layoffs in December 2022, and Bloomberg announced the firm expected more layoffs in mid-2023. On May 2, 2023, an individual familiar with the matter reported that Morgan Stanley has outlined its intention to reduce approximately 3,000 positions by the end of June. The projected reduction constitutes roughly 5 percent of the bank's overall workforce, with financial advisors and support staff exempted from these staff cuts. In October 2024, Morgan Stanley entered into a 40,000-tonne
carbon dioxide removal purchase agreement with
Climeworks, a
direct air capture startup company, for an undisclosed price. In January 2025, Morgan Stanley announced that it had decided to leave the Net-Zero Banking Alliance. Although this decision was made, Morgan Stanley remains vigilant in its commitment towards helping the world transition to net-zero carbon emissions. In October 2025, Morgan Stanley agreed to acquire
EquityZen, which operates a trading platform for buying and selling stakes in private companies. ==Organization==