The second sentence in Morgan Stanley’s Answer captures the essence of the message disseminated throughout the CMBS market “grapevine” – to wit, “the hyperbole and exaggeration of Young’s claims are symptomatic of the many problems that Young had during his employment at the firm”.  This is consistent with falsely cultivated “market buzz” by Morgan Stanley, which has served to pejoratively redefine Spencer Young’s personal character and undermine the credibility of his past achievements.  

“ A lie gets halfway around the world . . .

. . . before the truth has a chance to get its pants on. “

– Sir Winston Churchill

Accordingly, it is not surprising that Mr. Young was not been able to obtain gainful employment on Wall Street after Morgan Stanley's extensive smear campaign.  Prior thereto, when Mr. Young changed jobs, he often immediately had multiple offers, at dramatically higher levels of compensation – and which were predicated on fewer logged accomplishments than he now has.

Morgan Stanley’s clear objective has been to slander, besmirch and completely destroy Mr. Young’s reputation on Wall Street in the CMBS industry by persistent, pervasive and fabricated attacks on his integrity, and personal character, and calling into question his professional skills and managerial competence, so that it would be impossible for Mr. Young to obtain comparable employment.  By doing so, Morgan Stanley has preserved the value of their CMBS franchise generally . . . and the IQ® brand, specifically.  In addition, their efforts serve to obfuscate the conspiratorial scheme of Warren Friend, John Westerfield and perhaps others at Morgan Stanley.

Noted below are some of the more egregious instances of Morgan Stanley’s mendacious statements contained in their NASD filing.  Following each false statement is a sample of the prima facie evidence that fully contradicts it.  Moreover, this reveals the extent to which Morgan Stanley had crafted their malicious subterfuge.  Importantly, these statements have been specifically attributed to Morgan Stanley, who nuncupatively communicated this slander by surreptitious means to those firms who contemplated hiring Mr. Young – and this type of “grapevine” talk spreads quickly in the highly specialized CMBS industry.

What follows are five of the 97 instances of perjury committed by Morgan Stanley in their Answer filed with the NASD, followed by readily corroborated revelations of the truth, thereby providing important insight into their malicious smear campaign.

(1)   “Young’s claim that he made substantial improvements [to the Morgan Stanley Conduit] that increased production five-fold to $2.5 billion . . . is unsupportable . . . a misrepresentation  . . . and an instance of taking credit for something he had nothing to do with”

These statements by Morgan Stanley are especially DAMNING and EQUIVOCATING, and intended to undermine Mr. Young’s accomplishments, and call into question his integrity.  Moreover, it is what Mr. Young often heard attributed to Morgan Stanley and orally communicated to others in the CMBS industry.  The points noted below reveal just how malicious a fraud Morgan Stanley had perpetrated.  The truth lies in the evaluations by

• John Westerfield (Managing Director of Real Estate Debt Capital Markets) in his 1997 Performance Evaluation of Mr. Young: “[Spencer] has had very significant influence in the organization . . . Helped to bring management organization to the group . . .  pushed and implemented many of the key changes in the conduit, which has permitted group to increase volume to $1.3 Billion [vs. $0.5 Billion last year]”
• John Westerfield (Managing Director of Real Estate Debt Capital Markets) in his 1998 Performance Evaluation of  Mr. Young: “[Spencer has made numerous positive organizational changes . . . and was able to use his goal orientation and management skills to really deliver and get results . . . Spencer's thoughtful planning are the reasons he is able to reach the goals set for him . . . he sets goals, keeps track of them and achieves results”
• Bill Smith, (Global Head of Morgan Stanley Real Estate Investment Banking) in his 1998 Performance Evaluation of Mr. Young: “Spencer has had a major impact on the organization and management of the [Morgan Stanley Conduit].”
• Jon Groesbeck (Executive Director – Fixed Income Sales – West Region) in his 1998 Performance Evaluation of Mr. Young: “Spencer has done an incredible job bringing all the resources together to build a credible commercial conduit business . . . he is perceived highly for his knowledge and integrity”
• Mr. Young retained a copy of the 1998 fiscal year-end conduit production report, which specifically excluded any production that was not under his purview (e.g., “Large Loan” transactions or otherwise), supports the following facts:  1998 Loans Closed = $2,457,532,994  (or $2.5 billion); and 1998 Loans Securitized = $2,715,593,407 (or $2.7 billion).

(2)  “He washed out of the Principal Group because of his repeated errors and lack of teamwork  . . . he often failed as a team player. . . He often failed to keep his peers informed”

These statements by Morgan Stanley clearly HAVE NO MERIT and are OBVIOUSLY FABRICATED.  As noted in the “2000” section of this Chronology, Mr. Young requested to be transferred out of the Principal Group well before Mr. Westerfield began concocting his pack of lies to cover up his own managerial shortcomings.  In addition, Mr. Young’s colleague, George Kok quit shortly after Mr. Young transferred out because of the very same issues stemming from John Westerfield’s “unnatural” relationship with Russell Rahbany. 

The notion of Mr. Young not being a team player is absurd, but a commonly used ploy in a workplace “mobbing” because it is usually so very difficult to refute.  However, in Mr. Young’s case, there are numerous performance evaluations submitted over many years, by a wide range of people that document Mr. Young as a “strong team player.”, “Great team player.”, and “total team player”, who is “a real pro” and “an extremely valuable member of the team”, who is “in a class of his own”. . . because “one of his greatest strengths is his willingness to connect with all members of the team” and who “by far makes the most effort to include and communicate with all members of the team”, such that he is “one of the best at Morgan Stanley to communicate with the team at all levels”. 

This deliberately malicious fabricated personal attack was devised by John Westerfield to cover up his own poor judgment and managerial shortcoming -- in fact, he blatantly contradicts himself in the first of many well-documented performance evaluations noted below.

• John Westerfield (Managing Director of Real Estate Debt Capital Markets), in his 1997 Performance Evaluation of Mr. Young: “[Spencer Young] acted in a strong team player way and worked hard to make changes without being intrusive to others”
• Bill Smith (Group Head of Morgan Stanley Real Estate Investment Banking), in his 1998 Performance Evaluation of Mr. Young: “People like Spencer who has a pleasant personality  . . . he worked well with all the Dean Witter people and has been well received in the branches  . . . he is a Great team player”
• Tony Tufariello (Head of Morgan Stanley Securitized Product Group, Americas), in his 1999 Performance Evaluation of Mr. Young: "Spencer communicates very well with the entire group . . . a Great Guy to have on the team.”
• Jon Groesbeck, (Executive Director – Fixed Income Sales – Western Region), in his 1999 Performance Evaluation of Mr. Young: “Spencer is in a class of his own . . . he has the respect and confidence of both clients and peers . . . Spencer works well with others in the firm and is a total team player”.
• John Marzonie (Executive Director – Fixed Income Sales – Midwest Region), in his 2002 Performance Evaluation of Mr. Young: “By far, Spencer is one of the best at Morgan Stanley to communicate with the team at all levels.” 
• Jim Bowman (Executive Director – Fixed Income Sales – Midwest Region) in his 1998 Performance Evaluation of Mr. Young: “Spencer is a real pro . . . he articulates information clearly and effectively . . . he is an extremely valuable member of the team”
• Liz Haberkorn (Executive Director – Real Estate Debt Capital Markets), in her 1998 Performance Evaluation of Mr. Young: “Spencer has strong management skills and manages teams well to get the deal done.”
• Sanjeev Khanna (Executive Director – Securitized Products – Finance Group) in his 2002 Performance Evaluation of Mr. Young:   “Spencer is excellent at building consensus team goals”
• Jon Strain (Managing Director & Head of Morgan Stanley’s Securitized Products Trading Desk), in his 2002 Performance Evaluation of Mr. Young: “Spencer is very professional in his approach and . . .  has the best call report [communication] skills I have ever read . . . he is very diligent about communicating”.
• Various Analysts & Associates in their 2002 Performance Evaluations of Mr. Young: “One of Spencer’s greatest strengths is his willingness to connect with all members of the team, including junior members.” . . .  “[Spencer] by far makes the most effort to include and communicate with all members of the team”

[Note:  The 2001 Performance Evaluation process was cancelled by Morgan Stanley due to the Sept. 11 attacks, and the integrity of the 2000 Performance Evaluation Process was compromised by the “mysterious disappearance” of more than ten submitted evaluations, which Morgan Stanley has been unable to account for – notwithstanding the Performance Evaluations from 1997, 1998 1999 and 2002 present an accurate depiction of Mr. Young’s being the consummate team player with outstanding communication skills.]

(3)  “He made no contribution to the AXA [Agribusiness Monetization] transaction [which was the largest transaction of its kind and largest single transaction fee earned by Morgan Stanley’s Securitized Products Group in 2002]”

This statement by Morgan Stanley is SO FALLACIOUS, THAT IT IS BEYOND THE PALE – In reality, Spencer Young drove every aspect of this transaction, including developing the final recommendation, bringing in the winning bidder (Farmer Mac), negotiating the final transaction terms with Henry Edelman, the CEO of Farmer Mac, selecting and closely monitoring the work of the due diligence firm (Univest, the same firm  Mr. Young used exclusively at JPMorgan, when he was the Chief Operating Officer of JPMorgan’s Conduit), and overseeing every aspect of the transaction’s execution, so that it became the resounding success that it was. 

The person heading up the transaction on the client end was Nicki Livanos, who was so impressed by Mr. Young’s leadership on this transaction, she signed on to become of the seven Principals in Phase 1 of Project Atlas (described later in this document).

Handling the day-to-day transaction execution of this farm loan monetization was Sanjeev Khanna and Betsy Gibson, who submitted performance evaluations that year supporting Mr. Young’s direct role in the transaction, excerpts of which are noted below, along with senior client personnel who will attest to Mr. Young’s role in this transaction.

• Sanjeev Khanna (Executive Director – Securitized Products – Finance Group) in his 2002 Performance Evaluation of Mr. Young  –   “We were able to complete the innovative AXA agricultural portfolio monetization because Spencer stuck with the opportunity . . . he continuously pushed the client through each phase of the execution”
• Betsy Gibson (Analyst), in her 2002 Performance Evaluation of Mr. Young:  “Spencer did an excellent job during the AXA transaction in getting and keeping the rest of the team involved . . . As a junior member of the team it means a lot that he took the time to make sure that I was involved and not left out of any part of the process”
• Peter Noris, Chief Investment Officer at AXA / Equitable Insurance will attest to Mr. Young’s direct and intimate involvement in this transaction.
• Mike Vitale, Global Group Head of Real Estate at AXA / Equitable Insurance (and with whom Mr. Young worked when he was Treasurer and Controller of Citicorp Real Estate), will attest to Mr. Young’s direct and intimate involvement in this transaction.
• Nicki Livanos, Vice President of Real Estate at AXA / Equitable Insurance, will attest to Mr. Young’s direct and intimate involvement in this transaction.

(4)  “The IQ® program was [not] his idea” and he “overstated his role in the IQ transactions”

These statements by Morgan Stanley are FALSE, and deliberating constructed to be MISLEADING, and often difficult to prove in an orchestrated workplace “mobbing” – However, Mr. Young’s recommendation in April 1997, after only six weeks on the job is irrefutable, and the suggestion by others on the development team to call the new product SPENCER® [an acronym for Special Purpose Entity No Credit Enhancement Required], so that the Shelf Registration with the Securities & Exchange Commission could be marketed as “Spencer for Hire” are especially elucidating. 

In addition, Project Atlas Principals [further described in a separate section to this document], who were also real estate and capital markets group heads at the various firms participating in the IQ® deals will willingly testify and/or submit affidavits as to Mr. Young’s intimate, pivotal and leadership role in making this new brand a reality. 

Importantly, the emails which Morgan Stanley continues to withhold from Discovery will also provide further proof that these statements by Morgan Stanley are crafted to be maliciously FALSE so as to specifically undermine Mr. Young’s credibility in the CMBS industry – for Mr. Young was the concept developer and architect of the IQ® (“Institutional Quality”) brand of CMBS, the most successful proprietary product of its kind, carrying an intrinsic shareholder value in excess of $250 million, at the time of Mr. Young’s untimely termination, and may be worth over twice this amount now.

 

 

(5)  “From almost the beginning of his employment, Mr. Young got along poorly with his co-workers”

This statement by Morgan Stanley is NOT ONLY A BOLD-FACE LIE, IT DEFIES ALL VESTIGES OF RATIONALITY, AND MOCKS THE NOTION OF COMMON SENSE, for if this were the case, Mr. Young would never have:

• Been promoted to Executive Director;
• Received large bonuses and pay increases year-after-year
• Been put in charge of major initiatives of strategic importance [e.g., The Dean Witter “CreditSource® Commercial” Program];
• Received glowing performance evaluations year-after-year along the lines of a “strong team player.”, “Great team player.”, and “total team player”, who is “a real pro” and “an extremely valuable member of the team”, who is “in a class of his own”. . . because “one of his greatest strengths is his willingness to connect with all members of the team” and who “by far makes the most effort to include and communicate with all members of the team”, such that he is “one of the best at Morgan Stanley to communicate with the team at all levels”.  As one of the Fixed Income Analysts aptly wrote in a submitted 2002 performance evaluation of Mr. Young:  “Spencer is one of the nicest guys on the [trading] floor.  He treats everyone with respect and is very considerate.”

In addition to filing its fallacious Answer, Morgan Stanley actively intercepted Mr. Young’s gainful employment pursuits by broadcasting throughout the CMBS industry the very same lies and prevarications contained in their Answer.  Moreover, Morgan Stanley continued to rebuff Mr. Young’s overtures to mediate or otherwise negotiate a settlement, opting instead to follow a strategy of attrition, which they have long practiced and have been censured and admonished for and deemed to be an deliberate obstruction of justice – resulting in penalties and judgments approaching $2.0 billion over the past few years.

With their attrition strategy, Morgan Stanley has long practiced an especially distasteful and morally obnoxious approach of dedicating substantial resources to bully people into submission, no matter how amoral their objective.  Because of the magnitude of intrinsic value associated with the IQ® brand they are trying to protect, together with their wishing to protect the senior managers involved, Morgan Stanley intends to prevail by continuing their efforts to beat down Mr. Young’s spirit, wear out his resolve and deplete his resources, which obviously pale to those of a massive global financial institution such as Morgan Stanley, who has over $600 billion in assets, and 50,000 + employees.  

However, Morgan Stanley’s incessant bullying has had precisely the opposite effect on Mr. Young, whereby his resolve increases with every invidious action they have undertaken.

“We shall not flag or fail . . . We shall go to the end

 . . . We shall never surrender”

   – Sir Winston Churchill