Morgan Stanley Chairman Steps Down

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John Mack, chief executive officer of Morgan Stanley, testifies at a House Financial Services Committee hearing in Washington, D.C., U.S., on Wednesday, Feb. 11, 2009. Lawmakers in Congress prodded chief executive officers of Citigroup Inc. and seven U.S. banks that got government aid to increase the flow of credit and ease public anger over how lenders used taxpayer funds.

John Mack, Morgan Stanley’s chairman and former CEO, will step down from the board at the end of this year. James Gorman, who replaced Mack as CEO in 2009, will become the firm's new chairman. Nicknamed “Mack the Knife” for his cost-cutting strategies, Mack pushed traders to take more risk, which worked well until 2009, when Morgan Stanley lost $9 billion on a proprietary mortgage bet. His departure is seen as another sign that the company is becoming more cautious. As for Mack, he is working on a book about his years on Wall Street and will retain positions on other boards and as an adviser to GOP presidential hopeful Jon Huntsman.