But then again, we’re not investment bankers.
These loving nicknames—in addition to “Subprime Meltdown,” “Hitman” and “Mike Tyson’s Punchout”—were the suggestions of Morgan Stanley employees, referring to a collection of the mortgage-backed securities that led, in part, to the recent financial crisis.
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Now, a Taiwanese bank that bought these securities has brought a case against Morgan Stanley—releasing in the process hundreds of pages of internal documents. Included in these documents? Communications that reveal just how safe these bankers thought the securities were, as indicated by the nicknames that were being tossed around.
The lawyer representing the plaintiff sees these documents as a slam-dunk, proving the guilt of the investment bankers. He told ProPublica, “While investors and taxpayers all over the world continue to choke on Wall Street’s toxic subprime products, to this day not a single major Wall Street executive has been held accountable for misconduct relating to those products … They are generally untouchable, but we are pleased that the court in this case is ordering Morgan Stanley to turn over damning evidence, so that the jury will get to see what Morgan Stanley really knew about the troubled nature of its supposedly ‘higher-than-AAA’ quality product.”
However, Morgan Stanley doesn’t quite see this in the same shocking light—or admit that the naming contest even reveals any prior knowledge regarding the safety (or lack thereof) of the mortgage securities. They released in a statement: “While the e-mail in question contains inappropriate language and reflects a poor attempt at humor, the Morgan Stanley employee who wrote it was responsible for documenting transactions. It was not his job or within his skillset to assess the state of the market or the credit quality of the transaction being discussed.”
Whether or not the nickname contest reflects guilt on the part of the bank—or merely a failed attempt at humor by its employees—will now be up to the courts to decide.