The story of feuding co-heads is nothing new to Wall Street.
In fact, there’s a long history.
First there was Lehman Brothers Kuhn Loeb co-CEOs Lewis Glucksman and Peter Peterson. Their fighting reportedly lead to departures and the sale of the firm.
Then there was Goldman Sachs’s Henry Paulson, who was chief operating officer when he fought with with chief executive Jon Corzine. Paulson reportedly won control by threatening to leave and year later he replaced Corzine who was ousted.
Now the current co-heads of Morgan Stanley’s investment bank, Colm Kelleher and Paul Taubman, are both considered top contenders to replace James Gorman as president when he takes the helm as chairman in addition to his CEO title.
The thing is these guys constantly clash over investment banking and trading strategy, BusinessWeek reported.
What’s more is the tense relationship is so obvious to those at the firm the pair have even become the subject of company jokes.
But the real problem is their bickering may have lost business opportunities for Morgan Stanley.
The power struggle between the men, who have been running the Institutional Securities Group since January 2010, has taken a toll on the New York-based firm in frictional costs or lost business opportunities, six former executives said.
Gorman reportedly doesn’t agree.
BusinessWeek says he is aware of their tense relationship and would likely do something about if he felt the bank’s business was suffering as a result.
The response from Morgan Stanley spokesman Mark Lake completely ignores that Kelleher and Taubman don’t get along.
“The fact is, institutional securities just produced one of its strongest quarters ever in a very challenging environment, with the firm taking market share across many areas of sales and trading and investment banking.”
Business at Morgan Stanley is doing well, he says.
But as investment banks face uncertain futures, teamwork could only help.
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