In The Beginning . . .

Locales of a Perfect Storm

The Offenders & Their Methods

Their Underlying Intent

The Aftermath


Still I Rise


Next ?



Locales of a Perfect Storm


Locales of a 
Perfect Storm

Where it Occurred 
& How it Escalated

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The Perfect Storm
The crimes of MorganStanleyGate were principally perpetrated in New York and North Carolina, and escalated over time, as the confluence of diverse factors culminated in what is best likened to a “perfect storm” resulting in a devastating aftermath, which is covered in the section titled "The Aftermath".   

Mr. Young moved  to, and began investing in real estate in North Carolina, while his employment law attorneys in New York conducted their case preparation for his mounting claims against Morgan Stanley for employment fraud and their ensuing efforts to end to his Wall Street career.  As noted below, Mr. Young did this because he wanted to be close to three of his now adult sons, who were planning to attend college there.

The more significant factors which escalated the MorganStanleyGate scandal are summarized below, and segregated by state.

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Escalating Factors In New York

Success of IQ® – The value of this franchise  ($250 million +) would have become ethereal had Mr. Young left Morgan Stanley for another Wall St. firm on his own volition, which is why the fraud initiating MorganStanleyGate was crafted and executed in a notably Machiavellian manner.

Client Loyalty, Job Insecurity & Revenge – In the context of the success of the IQ® franchise, a trifecta of other factors helped spawn MorganStanleyGate: (1) client loyalty to Spencer Young (which made the value of IQ® franchise potentially transitory to Morgan Stanley); (2) job insecurity felt by Warren Friend (for when Mr. Young was at JPMorgan, he never lost in head-to-head marketplace competition against Mr. Friend); and (3) retribution for earlier leaving the Principal Transactions group, when it was headed at the time by John Westerfield and Tony Tufariello.

The Christian Curry Scandal – In 1998, this racial discrimination scandal received national media attention.  Although it unfolded four years prior to MorganStanleyGate, it is relevant because Christian Curry worked for Mr. Young¹ just before this erupted in the media, and Mr. Young observed (as an insider) how Morgan Stanley: (1) engaged in fraud, corruption and smear campaign tactics, (2) made payoffs to third parties to commit fraud on their behalf; and (3) collaborated with seemingly corrupt law enforcement to execute a fraud-based sting operation.  Importantly, this scandal resulted in the resignation of Morgan Stanley's General Counsel, Christine Edwards.

New General Counsel – Christine Edwards’ replacement as Morgan Stanley’s General Counsel was Donald Kempf, a senior litigation partner at Kirkland & Ellis.  One of his first orders of business was to appoint Kirkland & Ellis as primary counsel for Morgan Stanley.  Thus began the Morgan Stanley/Kirkland & Ellis (“MS/K&E”) Era, in which this tandem became notorious for fraud and obstruction of justice, and was exposed in the national media through ensuing scandals, including one which resulted in a $1.6 Billion Judgment.

The $1.6 Billion Judgment – Billionaire financier Ron Perelman received a $1.6 billion judgment (including interest) for having been defrauded by Morgan Stanley in his acquisition of SunBeam, and for having been subjected to extensive obstruction of justice engineered by Kirkland & Ellis.  During the proceedings, Morgan Stanley was described as a “corporate defendant that has no conscience [and] morally bankrupt”.  This event hastened a change in Morgan Stanley’s CEO.

John Mack Rejoins Morgan Stanley – Although earlier forced out in a power struggle following the merger between Morgan Stanley and Dean Witter, John Mack replaced Phil Purcell as CEO in June 2005.  Mr. Young contacted Mr. Mack to congratulate him and suggested a meeting to amicably resolve the fraud perpetrated by Messrs. Friend, Westerfield and Tufariello, but received “only the back of his hand”.²

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Escalating Factors in North Carolina

John Mack’s Influence in North CarolinaJohn Mack was born and raised in Morrisville, NC, attended Duke University in Durham, NC and is a member of Duke’s Board of Trustees, which was formerly chaired by one of his close friends, Bob Steel, who grew up in Durham, NC and is similarly a Duke alumnus.  Another close friend, Erskine Bowles, was born and raised in Greensboro, NC, worked at Morgan Stanley (where he met his wife), and is currently President of the University of North Carolina at Chapel Hill ("UNC"), as well as a member of Morgan Stanley's Board of Directors.  Both Mack and Bowles have been long term members of the Board of Directors of Cousin’s Properties (“Cousins”), a real estate investment company based in Charlotte, NC – Mack resigned from the Cousin’s Board in 2005 when he took the Morgan Stanley CEO job.  Cousins is redeveloping a property nearby one of Mr. Young's properties on Franklin St.

Sons Plan to Attend College in North Carolina – Mr. Young’s eldest son Michael attended Duke University played for their Men’s Lacrosse Team, and graduated in 2008. He was joined by this brother, Kevin, class of 2011.  Kevin’s twin brother Ryan had originally planned to attend UNC on a lacrosse scholarship, but the scholarship disappeared for unspecified reasons (it was later learned to be the result of undue influence from Erskine Bowles).  Ryan attended the University of Maryland, class of 2011, and became an All-American.

Investing In North Carolina – After Morgan Stanley blocked Spencer Young’s employment opportunities in New York, and while waiting for his civil claims against Morgan Stanley to be adjudicated, he began investing in commercial real estate in Durham and Chapel Hill, North Carolina, and bought a live-work condominium in Chapel Hill, so he could also be close to his sons.  In 2004 and 2005, he commenced redevelopment work on a specialty mall in Durham (The Pit Stop of Durham), and a retail/office property in downtown Chapel Hill (The Courtyard of Chapel Hill).

Banks With Close Ties – Among the commercial banks in the Triangle area, Wachovia Bank and Paragon Commercial Bank actively sought to establish banking relationships with Mr. Young, inviting him to luncheons, dinners, UNC basketball games, etc.  He was a high net worth individual with exemplary personal and business credit with over two decades of commercial real estate investment experience, and while on Wall Street, he completed over $30 billion in buy-side and sell-side CMBS transactions.  Based on the compelling terms offered, Wachovia and Paragon financed Mr. Young’s various real estate acquisitions in North Carolina, and provided him with exemplary banking services reserved for only their best clients.  These banks have close ties with each other, as virtually all senior banking executives at Paragon formerly worked for Wachovia, which in turn has close ties with Morgan Stanley and John Mack.

Enigmatic Landowners in Chapel Hill – Those who own land adjacent to The Courtyard of Chapel Hill had a long history of odd and combative behavior - for instance one was a notorious drug dealer / user, and the other had a long established reputation as a cantankerous bully.  Pursuant to promises provided by then Chapel Hill Mayor Kevin Foy and then Mayor Pro Tem Bill Strom, this was kept in check after Mr. Young purchased this property in 2005 . . . that is, until the late Summer of 2007.

The Daily Tar Heel  is the Newspaper of UNC – Beginning in the early Fall of 2007, this daily student newspaper began publishing numerous false and disparaging articles, often mirroring the content and timing of articles published by other local newspapers – at last count, there have been over SIXTY such articles.

Bob Steel becomes CEO of Wachovia – In July 2008, Bob Steel joined Wachovia Bank as its Chief Executive Officer, and it was shortly after his arrival that he exerted his influence on behalf of John Mack, resulting in Wachovia's reneging on a forbearance agreement associated with The Courtyard of Chapel Hill.

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Other Escalating Factors

Widespread Corruption – The level of corrupt influence Morgan Stanley and Kirkland & Ellis wield in the public and private sectors in New York and North Carolina is extensive, as described herein – and it is NOT restricted to New York and North Carolina.

Refusal to Succumb – Although everything, including the metaphorical kitchen sink, has been thrown at him, Mr. Young continues his quest for justice, keeping the following foremost in his mind:

 "We Shall Not Fail, Nor Falter . . .
We Shall Not Weaken, Nor Tire. . . .
Give Us The Tools And We Will Finish The Job."
–   Winston Churchill, Prime Minister of Great Britain
(During the “dark days of WW II)

So In Summary . . .
In New York ⇨ It was a valuable new Wall St. franchise, coupled with colleagues harboring feelings of insecurity and seeking revenge (manifested by their own shortcomings), along with the preceding scandals ousting Morgan Stanley’s CEO and Chief Legal Counsel, which were the factors most contributing to the onset of MorganStanleyGate in New York.

In North Carolina   It was Mr. Young’s love for his sons which led him here (after Morgan Stanley effectively ended his career on Wall St. to protect the IQ® franchise he created), and John Mack’s influence and the desperate efforts in the 
ensuing cover-up, which has exposed an incestuously corrupt environment, thus further augmenting this scandal.  

Then add  Mr. Young’s refusal to succumb to the elixir
. . . and you’ve got a scandal of epic proportion  MorganStanleyGate . . . the particulars of which are summarized in the section

1   In an instance of “workplace mobbing”, Mr. Young was asked to write a fabricated negative review on Mr. Curry’s performance, which he respectfully declined to do.  Moreover, Mr. Young was one of the few people Mr. Curry worked for/with at Morgan Stanley who were not named in his discrimination lawsuit.
2  Quote attributed to Ron Perelman in describing the similar rebuffing of his overtures for a settlement