Morgan Stanley Apologizes by E-Mail for Clinton's Speech
February 12, 2001
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Morgan Stanley Apologizes by E-Mail
After Clients Protest Clinton's Speech
By CHARLES GASPARINO
Staff Reporter of THE WALL STREET JOURNAL
Morgan Stanley Dean Witter & Co., facing hundreds of complaints from customers, issued an unusual mea culpa for hiring former president Bill Clinton to speak at one of its conferences.
The apology, in an e-mail to a chunk of the firm's five million brokerage clients from Morgan Stanley Chief Executive Philip Purcell, followed gripes from individual-investor clients who threatened to pull their savings out of the firm over Morgan's decision to hire Mr. Clinton as keynote speaker for its high-yield conference in Boca Raton, Fla., last Monday.
Morgan Stanley paid the ex-president, who recently made headlines for his controversial pardon of fugitive financier Marc Rich, at least $100,000 to speak at the event. In recent days, the firm said it was hit with "hundreds" of complaints.
"I fully understand why you are upset that former President Clinton spoke at one of our conferences," Mr. Purcell said in the e-mail. "We clearly made a mistake."
He won't get an argument from many clients. Anger over the firm's decision to hire Mr. Clinton forced Morgan Stanley to provide brokers with a set of "talking points" to appease some of their investors.
If a customer asks, for example, "Is Mr. Clinton coming?" the broker was directed to respond: "Yes, he is coming." If a customer says, "I'm going to pull my assets," the broker was to tell his clients not to "make emotional decisions on your finances based on this event ..." If a customer simply complains that having Mr. Clinton speak isn't such a good idea, the broker was asked to say: "Thank you for your input; I'll make sure management is told."
But the effort appeared to have backfired. The news triggered additional complaints from Morgan customers with accounts in its brokerage unit. A Morgan Stanley spokesman wouldn't say how many accounts actually were closed, but the controversy has hurt the New York firm, according to some people at Morgan Stanley.
In his e-mail, Mr. Purcell said the decision to hire Mr. Clinton "did not receive the proper review within the firm." He also said that Morgan "should have been far more sensitive to the strong feelings of our clients over Mr. Clinton's personal behavior as president."
A Morgan Stanley spokesman said the firm's conference planners, who selected Mr. Clinton to speak last autumn, "should have vetted" whether that was such a good idea "at a higher level" at the firm. The spokesman, Ray O'Rourke, said Mr. Purcell became aware that Mr. Clinton was to speak at the conference after the booking.
"We should have thought twice before the speaking invitation was extended," Mr. Purcell said in his e-mail. "Our failure to do so was particularly unfortunate in light of Mr. Clinton's actions in leaving the White House." |
