Counterparties: Grimes and misdemeanors

December 21, 2012

Welcome to the Counterparties email. The sign-up page is here, it’s just a matter of checking a box if you’re already registered on the Reuters website. Send suggestions, story tips and complaints to

When Morgan Stanley won the lead role in Facebook’s IPO in February, its lead technology banker Michael Grimes insisted that he be the “single driver” of the deal. In exchange, he acknowledged that it would be “his throat to choke” if anything went wrong.

In the wake of Facebook’s botched IPO, however, it looks like Grimes doesn’t have to be worried about any retribution from his employer. Fortune’s Stephen Gandel reports that Morgan Stanley won’t use its stringent clawback rules “to take any disciplinary action against Grimes or any of the bankers involved in the Facebook IPO”. This despite the fact that Morgan Stanley has been fined $5 million by Massachusetts’s securities regulator for selectively disclosing financial information to research analysts, a tactic Grimes did “everything but make the phone calls himself” to execute.

Perhaps Grimes is keeping his pay because he did nothing wrong. Jonathan Weil says the settlement is “farcical”, and that Morgan Stanley should have let the case go to a jury: “even viewed in the worst possible light,” he writes, “none of the conduct described by Galvin was an obvious breach of anything.” Weil suspects that “the real crime here seems to be that Facebook’s stock price fell a lot after the company went public in May, which of course isn’t a crime at all.”

Grimes is also keeping his pay because even after the Facebook fiasco, he’s still the biggest rainmaker on the Street. Gandel reports that in the seven months since the Facebook IPO, Morgan Stanley has generated $32 million in fees from 14 technology IPOs; JP Morgan is a distant second, with just 5 deals to its name in the same period. Grimes’s throat was safe all along, it seems. Just so long as he kept on bringing in the deals. — Ben Walsh

And on to today’s links:

The best 34 charts of 2012, as chosen by economists and business journalists – Matthew O’Brien

The NYT paywall is working much better than anyone expected – Edmund Lee

Modest Proposals
It’s time to sell Alaska – WaPo

Even More TBTF
The new threat to the financial system: derivatives clearinghouses – Bloomberg

Household formation and why it’s crucial for the US economy next year – Cardiff Garcia

Former Speaker of the House? – Ezra Klein
GOP revolts against fiscal cliff Plan B – NYT

Popular Myths
Structural changes do not explain high unemployment – NBER

Strange Bloomberg Headlines
“Carney Not Yet With Pink Set Sharing Policies Beyond BOE Circle” – Bloomberg

EU Mess
Southern European unemployment: The “largest policy failure in the developed world since the second World War” – Stuart Staniford

Debt is “one of America’s greatest exports” – Neil Irwin

The unemployed will be remotely monitored in the UK to ensure they’re looking for work – Telegraph

Financial Arcana
The tri-party repo market is improving by getting smaller – WSJ

Slideshows: a “wonderful, native storytelling tool” – Digiday

Crime and Punishment
Peter Madoff is $143 billion dollars in debt – Reuters

Follow us on Twitter and FacebookAnd, of course, there are many more links at Counterparties.


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

continuously i used to read smaller posts which also clear their motive, and that is also happening with this paragraph which I am reading at this time.

Wow, superb blog layout! How long have you been blogging for? you make blogging look easy. The overall look of your website is magnificent, as well as the content!

Nice weblog right here! Additionally your web site rather a lot up very fast! What host are you using? Can I get your associate hyperlink on your host? I wish my web site loaded up as fast as yours lol

Posted by traducere daneza | Report as abusive

Louis Vuitton Speedy 35FOLouis Vuitton OutletDOLouis Vuitton PursesETLouis Vuitton BagsBOLouis Vuitton Outlet OnlineFPLouis Vuitton OutletDTLouis Vuitton BagsASLouis Vuitton Outlet OnlineGPLouis Vuitton HandbagsDQLouis Vuitton OutletDOMichael Kors OutletGTMichael Kors Outlet OnlineFRMichael Kors BagEPMichael Kors Handbags OutletAUMichael Kors CouponGTMichael Kors BagsEOMichael Kors Outlet StoreDQMichael Kors BagsCQMichael Kors Outlet StoreCUMichael Kors BagsARbabyliss pro nano titaniumGTBabyliss ProEQbabyliss hair dryerAQBabyliss Pro Nano TitaniumBPBabyliss ProEOBabylissATBabyliss ProFPbabyliss miracurlEUbabyliss flat ironEQBabyliss Flat IronAOKate Spade HandbagsEQKate Spade BagsFTKate Spade OutletCRKate Spade PursesAUKate Spade HandbagsCTKate Spade New YorkGUKate Spade OutletCTKate Spade OutletFUKate Spade OutletBPKate Spade saleCQOakley OutletCTCheap Oakley SunglassesBSOakley Prescription SunglassesCSOakley SunglassesCTOakley Sunglasses CheapAOOakley SunglassesCSCheap Oakley SunglassesBRCheap OakleysBTOakley OutletAOCheap Oakley SunglassesGOJordan 11 Space JamDRSpace Jam 11sBRSpace Jam Low 11sGUJordan Retro 11DOSpace Jam 11sATSpace Jam Low 11sFOSpace Jam Low 11sAOJordan 11 Low Space JamGPJordan Retro 11ESJordan 11 Low Space JamFTKate Spade HandbagsERKate Spade OutletFSKate Spade New YorkBTkate spade pursesASKate Spade New YorkEOKate Spade OutletCPKate Spade Outlet OnlineCOKate Spade New YorkASKate Spade saleFPKate Spade Diaper BagERoakley outletBPoakley sunglasses cheapCQcheap oakley sunglassesFPoakley sunglasses cheapAOoakley sunglasses cheapCToakley outletDPoakley outletDUoakley outletFUcheap oakley sunglassesEPoakley outletDTray ban wayfarerFUcheap ray ban sunglassesDTray ban sunglassesGUray ban sunglassesDRray ban sunglasses saleFOray ban sunglasses saleGTray ban outletFTray ban sunglasses saleATcheap ray bansEOray ban sunglassesCOray ban sunglasses saleAScheap ray ban sunglassesFUray ban sunglassesCUray ban sunglasses saleDOray ban sunglasses saleFQray ban prescription sunglassesAOray ban sunglassesBPJordan Retro 9 BaronsDOJordan Retro 9 BaronsBOJordan Retro 9 BaronsBRBarons 9sBSJordan Retro 9 BaronsETJordan Retro 9 BaronsDOBarons 9sCPJordan 9 BaronsBTJordan Barons 9sBPJordan 9 Barons 2014CRSac a main Michael KorsFTSac Michael KorsCPMichael Kors FranceCQSac Michael KorsDQMichael Kors SacARSac Michael KorsERMichael Kors SacGSMichael Kors SacFS

Fantastic beat ! I would like to apprentice while you amend your website, how could i subscribe for a blog web site? The account aided me a acceptable deal. I had been tiny bit acquainted of this your broadcast provided bright clear idea