NEW YORK — — Morgan Stanley said Thursday that co-president Zoe Cruz, one of the most powerful women on Wall Street, will leave in the latest investment bank management shakeup since the summer's credit turmoil.
Robert Scully, who was named co-president along with Ms. Cruz last year, will remain at the firm in a new capacity. He will join a newly created office of the chairman, and will focus on Morgan Stanley's sovereign investors.
Ms. Cruz had been with Morgan Stanley for the past 25 years, and rose to her current title after former chief executive officer Philip Purcell promoted her in a move to consolidate power. There had been expectations that John Mack, the current CEO, would at some point place someone else in the job.
He did that on Thursday, naming Walid Chammah and James Gorman as co-presidents. Mr. Chammah, 53, was named global head of investment banking in July, while Mr. Gorman, 49, runs the global wealth management group.
Mr. Mack said in a statement that both will be able to lead Morgan Stanley during a challenging period. Investment banks have been forced to write down some $80-billion (U.S.) of losses in the past few quarters amid a growing credit crisis triggered by a spike in subprime mortgage defaults.
"We see significant opportunities to build on the market leadership positions we have across our global franchise and to take advantage of the strong foundation we've put in place in recent years," he said in a statement.
"Today's markets, however, are changing rapidly, and we're putting in place a leadership team that is ideally suited to help Morgan Stanley realize the opportunities ahead, while continuing to navigate the current challenging condition."
There were also major changes in Morgan Stanley's credit and mortgage-related businesses after the investment bank announced it would take a $3.7-billion writedown during the fourth quarter.
Michael Petrick — who heads the company's corporate credit group — will become co-head of institutional securities sales and trading. He replaces Neal Shear, who will go back to leading Morgan Stanley's commodities business.
The investment bank also announced that Tony Tufariello, the global head of its securities products group that suffered most of the mortgage-related writedowns, will retire from the company. A replacement has yet to be named.
A spokesman for Morgan Stanley declined to comment beyond the company's statement.
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