James Gorman, Morgan Stanley and the (Almost) Amazing Turnaround

Morgan Stanley HQ

Nearly a year ago, James Gorman sat in a chair on his firm's trading floor, clipped on a microphone and stared into a camera. For Morgan Stanley's CEO, it was Facebook judgment day.

Fortune magazine reports that next to him was CNBC's Maria Bartiromo. Gorman had agreed to the interview weeks before, back when the Facebook IPO still looked like it was going to be blockbuster, not the bust it turned out to be.

But Gorman decided to go ahead with the interview anyway. From the moment it started, though, it was apparent he shouldn't have. The lighting was bad. Gorman looked uncomfortable. He was unapologetic and combative. Gorman called individual investors who had lost money on the IPO 'naive'. Never mind the fact that Morgan Stanley and Facebook had made a killing on the deal.

But it wasn't just the fallout from Facebook that was dogging the CEO. Gorman was also facing a looming credit downgrade, an increasingly bitter fight with Citigroup over the price of his Smith Barney acquisition and a growing revolt among the brokers that he was now being bullied into paying up for. A number of observers predicted Gorman would be out within a few months.

But that's not what happened....

Hit the link below to access the complete Fortune article:

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