Envied by rivals for its share of the hedge fund prime brokerage market, Morgan Stanley was an early and successful entrant in the business. Alongside Goldman, Sachs & Co. and now-defunct Bear Stearns Cos., it dominated for 20 years or more. But Morgan’s stature dropped not long after Lehman Brothers Holdings filed for bankruptcy on September 15 (the same day Merrill Lynch, in a preemptive move, sold out to Bank of America Corp.).
