Morgan Stanley shares surged by nearly a fifth following Trump’s victory last week, as overall US bank shares enjoy sharpest recovery rally since 2008

Bosses at Morgan Stanley made more than $10m (£8m) selling shares in the investment bank as its stock surged on the back of Donald Trump’s presidential victory.

James Gorman, Morgan Stanley’s chief executive, made a $2.9m profit on Friday by exercising share options granted to him at $22.98 and then selling the shares at $37.70. A slew of other executives followed suit.

Morgan Stanley shares surged by nearly a fifth – to their highest in more than a year – following Trump’s victory last week. Overall US bank shares are enjoying their sharpest recovery rally since the 2008 to 2009 financial crisis as investors buy up bank stocks hoping that Trump’s promise of tearing up regulation will help banks make bigger profits. Traders also expect Trump’s plans for huge infrastructure investment to raise inflation and the Federal Reserve to lift interest rates, which would also help banks make more money.

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The S&P 500 banks index, which tracks the biggest US banks, rose by 10.2% in the three days after Trump’s victory – the best three-day performance since August 2009. In those three days, Wells Fargo shares rose 13.6%, JPMorgan Chase shares rose 9.5% and Bank of America shares climbed 11.9%.

Analyst say US banks’ shares could still be a bargain at today’s prices as Trump’s exact stance on regulations such as the Dodd-Frank act become clear. Trump has criticized Obama’s centrepiece 2010 regulatory reform of the banking sector, designed to try and help prevent a fresh financial crisis, as a “very negative force”.

Trump’s transition website, greatagain.gov, describes Dodd-Frank as “a sprawling and complex piece of legislation that has unleashed hundreds of new rules and several new bureaucratic agencies” and pledges to repeal it and replace it with “new policies to encourage economic growth and job creation”.

A slew of other Morgan Stanley executives also made big profits by buying and selling their share options on Friday, according to regulatory filings with the Securities and Exchange Commission (SEC). Colm Kelleher, the bank’s president, made $3.3m; Dan Simkowtiz, the head of investment management, made $2.3m; and Eric Gross, the chief legal officer, made $475,000.



Jonathan Pruzan, the bank’s chief financial officer, sold 44,625 of his share options on 8 November – before the result of the election – for $33.90 a share. He would have made $174,000 more if he had, like his colleagues, waited until Trump was declared the victor.

Gorman was paid $21m last year.