Morgan Stanley’s top trader is leaving. Fabrizio Gallo, whose title was “global head of equities” but whose real claim to fame was running the firm’s proprietary trading desk, is moving from New York To London. The official reason is that Gallo wants to “spend more time with his family.”
We’re convinced that no one would actually use the “spend more time with family” line unless they are trying to convey that the real reason for leaving is something else. Very probably Gallo will pop up at another firm, or perhaps start his own hedge fund before long. His predecessor at Morgan, Sutesh Sharm, left to join Vikram Pandit’s Old Lane hedge fund in 2006.
So why is Gallo leaving? We suppose that after 10 years as a managing direcrtor at Morgan Stanley, he might just want to retire. But we also have no doubt the pay curbs that come with TARP played some role in his thinking. Whatever Gallo was paid, you can be sure it far exceeded the caps that the Obama administration has proposed.
Gallo is being replaced by Luc Francois and Ted Pick, who will be global co-heads of equities. Francois, who is based in London, left France’s Societe Generale last year after “rogue trader” Jerome Kerviel was accused of unauthorised tradie that led to a 4.9 billion euros loss. Pick, who works out of New York. is a long time Morgan veteran, having joined the firm around 1990.
One interesting tidbit: for a few years Gallo’s title was “Global Head, Equities and Proprietary Trading.” At some point in the recent mess, those words “proprietary trading” got dropped. Prop trading, once the hottest thing on Wall Street, seems to have developed a bad rep.