Oct. 25 (UPI) -- Morgan Stanley co-president Edward "Ted" Pick will become the company's next chief executive officer, effective January 1, the company's board announced Wednesday.
Pick will join the board the same day.
"The board has unanimously determined that Ted Pick is the right person to lead Morgan Stanley and build on the success the firm has achieved," said Tom Glocer, lead director of the board.
"Ted is a strategic leader with a strong track record of building and growing our client franchise, developing and retaining talent, allocating capital with sound risk management, and carrying forward our culture and values."
The company said James Gorman will become executive chairman, co-President Andy Saperstein will become the head of wealth and investment management, and Dan Simkowitz will become co-president of the firm and the head of institutional securities.
"Morgan Stanley is a storied institution, and I am deeply honored to have been chosen to lead it," Pick said. "We have a global diversified business with a leading client franchise. Thanks to James' excellent leadership, our firm is now well-positioned to succeed across market cycles, and I am excited about the opportunities for future growth."
Pick joined Morgan Stanley in 1990 and was promoted to managing director in 2002.
Morgan Stanley, along with a dozen other high profile financial institutions, were linked to risky residential mortgage-backed securities in the run-up to the 2008 financial crisis, according to the U.S. Department of Justice. That contributed to the 2008 financial collapse.
Swiss banking giant UBS Global was fined more than $1.4 billion for its role in the risky securities scandal.
All told, the Justice Department says it collected more than $36 billion in RMBS-related civil penalties from 18 major domestic and foreign entities, including Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank. General Electric, Goldman Sachs, HSBC, JPMorgan, Moody's, Morgan Stanley, Royal Bank of Scotland, S&P and Wells Fargo.
Losses on residential mortgage-backed financial assets began to cause strains in global financial markets, which triggered the financial crisis, and in in December of that year, the U.S. economy entered a recession as several large financial firms experienced financial distress.
A year later, the economic contraction had worsened and ultimately became deep and protracted enough to acquire the label "the Great Recession."
The financial crisis and resulting recession is estimated to have cost the country 15% of GDP, or $4.6 trillion, by 2016, as measured by the decrease in per-capita GDP compared to the pre-crisis trend, while more than 6 million Americans lost their homes to foreclosure.