Ex-Morgan Stanley Executives Again Push for Chief’s Ouster

Eight former executives of Morgan Stanley appealed to the investment bank’s board for a second time Thursday to oust Chief Executive Philip Purcell, saying the firm had lost its way under his leadership.

The letter signed by the former executives, including former Chairman Parker Gilbert and former CEO Robert Scott, also was published as a full-page ad in the Wall Street Journal.

The group said Morgan Stanley’s stock -- of which they collectively own 11 million shares -- “has dramatically underperformed” and “return on equity has been eroded.”

In addition, they said, Morgan Stanley has done poorly in retail securities and in asset management.

“It is a failing report card,” the letter said.

The former executives also complained about the management shake-up Purcell has initiated, calling the loss of several key executives “an outrage.”

“We view the board’s actions, including its apparent support of this ‘reorganization,’ as a failure of corporate governance, a failure to fulfill its fiduciary duties and a failure to act in the best interests of the shareholders of Morgan Stanley,” the letter said.

The former executives had urged the board to remove Purcell in a letter March 3.

Morgan Stanley shares rose $1.97 to $57.25 on the New York Stock Exchange.

The latest letter was made public a day after Morgan Stanley said its global head of institutional equity trading had resigned, joining a number of other high-ranking executives who have walked out.

A company spokeswoman confirmed the departure of Guru Ramakrishnan. His decision to leave came a day after the resignations of his boss, John P. Havens, head of Morgan Stanley’s institutional equity division, and Vikram S. Pandit, president and chief operating officer of its institutional securities group.

The wave of exits followed Purcell’s decision to replace President Stephan Newhouse with two co-presidents, Morgan Stanley veterans Stephen Crawford and Zoe Cruz.