Morgan Stanley lawyer to step down

Gary Lynch will step down as Morgan Stanley’s senior in-house lawyer, becoming the latest executive to change posts since James Gorman succeeded John Mack as chief executive.

Mr Gorman, who replaced Mr Mack in January, has continued to put his stamp on a management team that includes many officers with strong ties to his predecessor. He has shifted some of the bank’s most senior executives to new roles and brought others in from the outside.

Mr Lynch, a former enforcement director for the US Securities and Exchange Commission, followed Mr Mack to Morgan Stanley in 2005 from Credit Suisse First Boston. The attorney moved to London last year for an expanded role in managing the bank’s European operations.

Mr Gorman wants his senior lawyer to be based in New York, a person familiar with the matter said.

“We have started a process of selecting a new chief legal officer who will be based in New York,” Mr Gorman wrote on Tuesday in a memorandum to employees. “This process will include a review of both internal and external candidates.”

Eric Grossman, head of litigation and general counsel for the bank’s Americas operations, is favourite to succeed Mr Lynch as chief legal officer, the person said. Mr Lynch will stay on with Morgan Stanley in London as a vice chairman and serve on the bank’s operating and management committees.

“He will also take on key relationship responsibilities with our international clients,” Mr Gorman wrote.

Mr Mack remains the bank’s chairman.

As the SEC’s enforcement director, Mr Lynch led the government’s investigations into Michael Milken, Ivan Boesky and other Wall Street figures implicated during insider-trading scandals of the 1980s. He was a partner at Davis Polk from 1989 until 2001, when he joined Credit Suisse.

Mr Gorman has installed Colm Kelleher, Mr Mack’s finance chief, as co-head of the bank’s institutional securities arm and named Ruth Porat, an investment banker, as his successor. Greg Fleming, a former colleague of Mr Gorman’s at Merrill Lynch, joined Morgan Stanley this year as head of asset management.

Mr Grossman joined Morgan Stanley in 2005 from Mr Lynch’s former law firm, Davis Polk.