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Morgan Stanley CEO Gorman to step down within a year

STORY: Leadership at one of the largest U.S. banks will soon be changing hands.

Morgan Stanley CEO James Gorman on Friday told shareholders he plans step down over the next year, ending a 13-year run during which he built the Wall Street firm into a wealth management powerhouse.

During his tenure, Gorman refocused the bank into a more diversified company that is less reliant on what have been its traditional strengths: trading and investment banking.

The steadier business of wealth management accounted for 45% of the firm's revenue in the first quarter.

Gorman was the key architect behind Morgan Stanley's purchase of Smith Barney, a brokerage and investment adviser that became a cornerstone of the bank's wealth management arm.

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His other major deals include the acquisition of online broker E*Trade.

Still, it has not all been smooth sailing for Gorman.

The company this month acknowledged an ongoing investigation by U.S. regulators. Reuters has reported that the SEC has been probing whether executives may have broken rules by tipping off hedge funds ahead of large sales of shares that the bank has managed.

Gorman, who is 64, said three potential successors have been identified by the bank’s board, but didn’t name them.

Co-president Andy Saperstein, who runs the bank’s prominent wealth management business, is said to be a leading contender, along with fellow co-president Ted Pick and the firm’s head of investment management, Dan Simkowitz.

Gorman said he will become executive chairman once a new CEO is chosen.

Shares of Morgan Stanley were down more than 2% in Friday trading.