Morgan Stanley in Joint Venture to Create World's Largest Retail Brokerage
May 31, 2009
Cleary Gottlieb advised Morgan Stanley in a joint venture – Morgan Stanley Smith Barney – with Citigroup Inc. that combined both parties’ retail brokerage operations and created the largest retail brokerage in the world, in terms of the number of financial advisors. Morgan Stanley Smith Barney will be owned 51% by Morgan Stanley and 49% by Citigroup. Definitive agreements were signed on January 13 of this year and the transaction, which had initially been expected to close in the third quarter, closed on May 31.
Cleary Gottlieb was engaged by Morgan Stanley after the execution of the definitive agreements in January to negotiate a number of interconnectivity agreements among Morgan Stanley, Citigroup and Morgan Stanley Smith Barney related to the distribution of securities, the transmission of client order flow, the provision of research, the sweeping of customer funds, the provision of transition services and certain related issues.