John Mack, Old-School Financier, Coaches Fintech Wannabes
October 20 2018 - 11:29AM
Dow Jones News
By Liz Hoffman
A decade after the financial crisis, The Wall Street Journal has
checked in on dozens of the bankers, government officials chief
executives, hedge-fund managers and others who left a mark on that
period to find out what they are doing now. Today, we spotlight
former Morgan Stanley CEO John Mack.
When John Mack stepped down as Morgan Stanley's chief in 2010,
his successor, James Gorman, offered him an office a few doors down
from his own on the 41st floor of the bank's Times Square
headquarters. "Trust me, " Mr. Mack says he replied. "You don't
want the retired chairman sitting just down the hall."
Mr. Mack went a little farther, taking an office at a Morgan
Stanley branch on Fifth Avenue. There he has been working with
financial-technology startups, dabbling in bitcoin and watching as
the Wall Street he traveled to power -- brash and cutthroat --
gives way to a mellower brand of finance embodied by his successor,
Mr. Gorman.
The 73-year-old is among a handful of former Wall Street
executives, including Citigroup Inc.'s Vikram Pandit and Barclays
PLC's Anthony Jenkins, who are reinventing themselves in fintech.
He has tried to advise, and at times rein in, entrepreneurs and
founders whose lack of experience has occasionally landed them in
trouble.
Personal-loan marketplace LendingClub Inc., where Mr. Mack has
been a board member since 2012, ousted CEO Renaud Laplanche two
years ago after the company sold loans to an investor with
falsified information. A subsequent investigation found other
irregularities that ultimately led to a settlement with securities
regulators in which a LendingClub subsidiary, Mr. Laplanche and
another executive agreed to pay $4.2 million.
"These young men and women are very smart, but they make
mistakes because they're inexperienced," Mr. Mack said. "Hopefully
I can bring some judgment."
He drew parallels to his own career. At times a polarizing
figure, he quit Morgan Stanley in 2001 after losing an internal
power struggle, only to be reinstalled in a 2005 palace coup as its
chief executive. "There was a part of me that was just an ass," he
said. "You learn by making mistakes. You change."
Mr. Mack is old-school Wall Street personified. A backslapping
Southerner and star linebacker at Duke University, he was among the
jocks that ruled Wall Street in the 1980s and 1990s but who have
given way to new archetypes: computer coders, entrepreneurs,
client-schmoozing bankers.
He is credited with steering Morgan Stanley intact through the
2008 crisis, resisting pressure from regulators to sell the firm
for $1 to JPMorgan Chase & Co.
After Bear Stearns was sold and Lehman Brothers failed, "I knew
we would be next," Mr. Mack told an audience at the University of
Pennsylvania in 2009. "One thing I could not do is let my team see
how concerned I was."
He took to bringing a blood-pressure cuff to meetings of his
executive team to lighten the mood. (One executive went to the
hospital after testing it out.) When he stopped by the war room
where executives had camped out to monitor the firm's cash
position, he found them eating day-old pizza and meatball subs; the
next day he ordered salad and tuna-fish sandwiches.
"We had turned stress eating into an art form," said Tom Wipf, a
senior Morgan Stanley executive. "John was there, walking the
floor. That's just who he is."
Morgan Stanley survived the crisis by agreeing in September 2008
to become a Federal Reserve-regulated bank, taking advantage of a
government funding backstop, and by raising $9 billion from Japan's
Mitsubishi UFJ Financial Group. A year later, Mr. Mack handed the
reins to Mr. Gorman, who has stabilized the firm and improved
earnings.
Mr. Mack spends more time today at his vacation home off the
North Carolina coast. A longtime road cyclist, he recently bought a
Peloton, the indoor spin bike with a cult following.
He bought some bitcoin early on but sold it last year after
regulators rejected an application for an exchange-traded fund that
would track the price of the cryptocurrency. He missed out on
bitcoin's 2017 rally. "You can't time the market," Mr. Mack
said.
Write to Liz Hoffman at liz.hoffman@wsj.com
(END) Dow Jones Newswires
October 20, 2018 11:14 ET (15:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Morgan Stanley (NYSE:MS)
Historical Stock Chart
From Aug 2024 to Sep 2024
Morgan Stanley (NYSE:MS)
Historical Stock Chart
From Sep 2023 to Sep 2024