Morgan Stanley missed its internal trading revenue target, $26 billion, by 40% last year, according to Bloomberg.
We knew trading revenues couldn’t be good after we heard rumours of Jack DiMaio’s fixed income team’s massive loss.
But it turns out they 40%-off bad, so bad that it looks like now James Gorman (now CEO) and Tom Kelleher (Co-President Of Institutional Securities and Executive Vice President) are distancing themselves from DiMaio as far as possible.
Three people told Bloomberg that Gorman and Kelleher didn’t get to interview him before he was hired, and it says they lost confidence in him after he was.
“Mack and Chammah hired DiMaio to replace Roberto Hoornweg, 43, without letting Gorman and Kelleher, then co-president and CFO of the firm, interview DiMaio, three people said.”
“Kelleher, who moved to London from New York this year, and Gorman also lost confidence in DiMaio’s ability to improve performance at his unit.”
In fact the article seems to blame Mack and DiMaio for the firm’s recent fixed income losses. Mack for hiring him even though “DiMaio had a background in credit trading, which includes trading in corporate bonds, and less experience with interest rates and foreign exchange.” And DiMaio for unspecified mistakes.
Even Bloomberg throws quotations around the one compliment it pays him. [UPDATE: Quotes surround “ideally suited” because it’s from a press release about his hire.]
“[Morgan Stanley] brought in Jack DiMaio to run interest-rates, bond and currency trading with then-president Walid Chammah, 57, deeming him “ideally suited” to turn around the business.”
Now with DiMaio gone (he was apparently fired in January), Gorman is apparently “finally” comfortable with the leadership in place.
So all eyes are on the firm’s fixed income returns as it reports earnings this week (Thursday).