Tom Nides rejoins Morgan Stanley

Tom Nides has rejoined Morgan Stanley two years after leaving the investment bank to become deputy to Hillary Clinton, the former US secretary of state.

Mr Nides will become Morgan Stanley’s vice-chairman and report directly to James Gorman, chief executive. He was formerly chief operating officer at the bank and a key aide to John Mack, Morgan Stanley’s CEO before Mr Gorman.

“We are excited to have Tom rejoin the management team, this time focusing on the firm’s clients,” Mr Gorman said in a statement.

Mr Nides said he was delighted to be returning to Morgan Stanley “at a time when the firm is clearly gaining momentum”.

The bank has been attempting to reinvent its business, by focusing on steady income from wealth management and retail brokerage rather than volatile earnings from trading.

On Tuesday. Morgan Stanley said in a regulatory filing that it had lost money in trading on 37 days last year – the fewest since 2007.

Mr Nides’ return to the bank comes amid speculation that Ruth Porat, Morgan Stanley’s highly regarded chief financial officer, may leave – to take up the deputy secretary position at the US Treasury.

Morgan Stanley has declined to comment on suggestions that Ms Porat is President Barack Obama’s first choice for the position.

Mr Nides succeeded Jack Lew, Mr Obama’s option for Treasury secretary, when he joined the US state department as deputy secretary of state.

His record of public service and allegiance to the Democratic party, as well as to Bill and Hillary Clinton, won him the political position in spite of a popular backlash against the financial services industry.

Mr Nides was the first outside addition to Morgan Stanley’s senior management after Mr Mack took up the reigns of CEO in 2005. Mr Nides, a former chief executive of public relations firm Burson-Marsteller, was initially hired as chief administrative officer.