Federal Reserve Must Block Morgan Stanley-E*Trade Merger

July 22, 2020 Press Release

Washington, D.C. — Today, four organizations sent a letter to Federal Reserve Chairman Jerome Powell encouraging him to reject Morgan Stanley’s proposed acquisition of E*Trade Financial Corporation for reasons related to financial stability, competition, and general compliance failures. The letter follows a previous letter sent to Chairman Powell by nine economic justice organizations, which encouraged the Fed to freeze merger and acquisition activity for corporations and banks receiving support through the Fed’s COVID-19 emergency lending programs.

If approved, a Morgan Stanley-E*Trade merger would make an already “Too Big To Fail” bank even bigger. Morgan Stanley would control a greater share of the wealth management industry despite it harmful investments and its record of repeated legal violations, which harm customers and investors and prove the bank is already “too big to manage.”

“During a pandemic and recession that will surely result in greater inequality and corporate concentration, Morgan Stanley’s proposed acquisition of E*Trade poses real risks to competition and financial safety,” said Graham Steele, Senior Fellow at American Economic Liberties Project. “The Fed has no business waving through yet another merger that makes one of our nation’s biggest banks even bigger.”

“Morgan Stanley must be stopped from acquiring E*Trade and becoming an even bigger financial business in an already highly concentrated market,” said Lisa Gilbert, Executive Vice President of Public Citizen. “This merger won’t just harm consumers, it will put our entire economy at risk. This too big to fail merger is too big to approve.”

“With its history of abuses, including antitrust and other violations that have spawned more than 40 actions against it, Morgan Stanley is clearly a company whose power and scope should be limited, not increased,” said Stacey Rutland, Founder of Income Movement. “The Federal Reserve must deny this application. Now is the time to take a stand.”

A copy of the letter is available here. It was signed by: the American Economic Liberties Project, Demand Progress Education Fund, Income Movement, and Public Citizen.

Learn more about Economic Liberties here.


Economic Liberties works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. AELP believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.