The Morgan Stanley 'Sh*tbag' Email Shows Risks Of Joking Around

Joke Disguise

You never know when those jokey emails are going to be used in evidence in a lawsuit, or pored over by regulators.

The New York Times reports that on March 16, 2007, Morgan Stanley employees working on one of the toxic assets that helped blow up the world economy discussed what to name it.

Among the team members’ suggestions: Subprime Meltdown, Hitman, Nuclear Holocaust and Mike Tyson’s Punchout, as well a simple yet direct reference to a bag of excrement (Shitbag).

The emails came to light thanks to a lawsuit brought against Morgan Stanley by a Taiwanese bank that invested in a $500m collateralized debt obligation.

Although possibly technically correct (the shitbag CDO is said to have ultimately lost $415m of its value), it probably wasn't a good idea to josh around in this way.

Here's the email exchange:

From: xxxx
Sent: Friday, March 16, 2007 1:44PM
To: xxxx; xxxx
cc: xxxx
Subject: RE: STACK - CCB

or ... Subprime Meltdown 2007

xxxx
Morgan Stanley | Fixed Income
xxxx
New York, NY xxxx

----

From: xxxx
Sent: Friday, March 16, 2007 9:42AM
To: xxxx; xxxx
cc: xxxx
Subject: RE: STACK - CCB

How about

• Nuclear Holocaust 2007-1

• ShitBag 2007-1

• Mike Tyson's Punchout 2007-1

• Fludderfish

Just kiddng (in case you couldn't tell) --- I like Chalfont 2007-1 --- it's a pain to say, but it's a very special place

xxxx

Morgan Stanley said 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 skill set to assess the state of the market or the credit quality of the transaction being discussed'.

Hit the link below to access the complete New York Times article:

Financial Crisis Suit Suggests Bad Behavior at Morgan Stanley

image: © Kavewall

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