By Liz Hoffman 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 22, 2018).

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 22, 2018 02:47 ET (06:47 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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