Mack axes potential successor

Morgan Stanley co-president Zoe Cruz is the latest casualty of the sub-prime mortgage crisis, stepping down after 25 years at the firm. Ms. Cruz, who oversaw the bank's trading and banking operations, was seen as the as the leading candidate to succeed chairman and chief executive John J. Mack (InvestmentNews, Nov. 9) . The New York-based financial services company named Walid Chammah and James Gorman to replace Ms. Cruz and Robert Scully, the other co-president, according to an internal company memo dated yesterday. Mr. Scully will remain at the firm, focusing on the firm's key clients, with an emphasis on global sovereign investors. On Nov. 7, Morgan Stanley disclosed $3.7 billion of losses on mortgage-related securities (InvestmentNews, Nov. 8) . The company stated in the memo that its disclosures "reflect the full extent of the company's sub-prime related exposure as of Oct 31, 2007." Co-President Zoe Cruz is retiring from the Firm after 25 years of service to Morgan Stanley. Mr. Mack said in the memo. "We greatly appreciate the enormous contributions Zoe has made in a wide variety of roles, and we are confident that she will continue to do great things in the years ahead."