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Only the Men Survive


Zoe Cruz at the foreign-exchange trading desk in 1997.  

After being made a managing director, in 1990, Cruz moved up to co-head of the foreign-exchange division in 1993. But she wasn’t going to rise as quickly as she wanted without help. “If you’re a man who’s mediocre and you get along with everybody, the rising tide will usually save you,” says one female Morgan Stanley executive. As a woman, “you need a huge level of sponsorship.”

For Cruz, that sponsor would be John Mack. Mack had emerged from the bond-trading division in the seventies to become a company star. He was known for being confrontational and intimidating (he broke several telephones during his days in sales and once threw a chair at a wall), but he was also a sensational salesman who could “charm the eyes out of a rattlesnake,” in the words of one confidante.

While Mack and Cruz had known each other since she began at the firm (he’d interviewed her in 1982), they became closer when Mack was made president of the fixed-income division, which encompassed bonds, commodities, derivatives, and currencies, in 1993. Associates say Mack saw in Cruz things he liked about himself. He too was the child of immigrants, raised by Lebanese parents in North Carolina. He too had a reputation as a volatile but decisive leader who enjoyed taking risks. “John always liked people that were brash and not afraid to tell you to go fuck yourself to your face,” says a onetime Morgan Stanley employee who knows Cruz and Mack. “There was a personal thing there.”

But Cruz also served a larger purpose for Mack. As he rose in the company, he came to see women’s advancement as a major part of his legacy. By the late nineties, sex discrimination had become a thorny issue for the company. A Morgan Stanley executive named Allison Schieffelin was making waves, claiming that her boss denied her promotions and discouraged her from participating in “men’s events such as golf outings, football games, and ‘boys’ nights out.’ ” Vikram Pandit, the head of the equities division where Schieffelin worked, hosted a dinner for her and five other women to hear their grievances. Pandit told them that pervasive sexism was a “cultural thing,” and while it was “unfortunate,” he suggested they “look forward” and build a foundation of equality for the next generation. The women were not satisfied: It was “obvious [Pandit] is going to do nothing to help us in this generation,” said one. In 2001, Schieffelin and the Equal Employment Opportunity Commission filed a lawsuit claiming women had been denied opportunities for advancement. (In 2004, Morgan Stanley settled the suit for $54 million, which was distributed among 67 female employees.)

Long before the suit was filed, Mack made an effort to get out in front of the gender issue by inviting female executives, including Cruz, on women-only golf retreats. If his intentions were noble, his idea for leveling the field was flawed. Rather than encouraging male supervisors to interact with their female employees on neutral territory, Mack tried to teach the women the skills he thought they needed to compete—namely, a good backswing. Few of the women took up the sport, however. As one current Morgan Stanley employee puts it, “There are some women who try to be a guy’s girl. I never saw that be successful.” For her part, Cruz tried golf once, played poorly, and decided it was too time-consuming.

A former female associate says Cruz was important in articulating the challenges of women to Mack. “We start men and women at the same line, but we make women jump over the log and through the trees and over the hoop,” she told him. For Mack, says the associate, “that was just totally eye-opening.”

But Cruz was not a feminist. While she attended internal meetings about women’s issues at the company through the years, she could hardly be considered an advocate. She argued against such programs as “flex time” for women who wanted to have children. And when asked by Pandit in 1998 what the company should do about Schieffelin’s discrimination complaints, Cruz told him he should simply pay her off and make the whole thing go away.

For Cruz, the bottom line on gender politics at Morgan Stanley was literally the bottom line. “She was incredibly results-oriented. She wouldn’t promote somebody because she was a woman,” says a former female associate. “She was not someone who every woman could feel, ‘Okay, she’s on my team because she’s a woman.’ ”

After orchestrating a controversial merger with Dean Witter in 1997 and rising to president of the company, Mack promoted Cruz to be head of the $2 billion fixed-income division that he had once run, choosing her over a well-liked executive named George James. Cruz had had some dramatic successes, growing the foreign-exchange division’s profits from about $170 million a year to $670 million, but foreign exchange was still a small business, whereas James had run the much larger debt-derivatives division. The company was divided over whether Cruz was rising on merit. “Half the people said, ‘What the hell is going on?’ ” says a former executive at the firm. “The other half said, ‘She’s a bright woman.’ ”


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