J.P. Morgan Chase & Co., still making changes to the management of its investment bank in the wake of lackluster performance, on Wednesday announced the abrupt departure of its head of U.S. equity sales and trading.
Mino Capossela was once a fast-rising star. The post-merger Morgan Chase courted him in 2001 as part of an aggressive effort to build the equity trading and underwriting business. His defection that year from Goldman Sachs Group, where he was a co-head of U.S. equities, was considered a coup for Morgan.
But its equity group has failed to gain share among the top stock underwriters. Part of the problem has been the market doldrums, but some observers say Mr. Capossela may have had trouble fitting in.
Morgan Chase made a big push two years ago to build its equity unit, but in recent months it has pulled back and focused on developing an expertise in specific areas rather than trying to do everything at once.
Still, observers said they were surprised at Mr. Capossela's ouster. One analyst suggested that it may signal that Morgan Chase is reconsidering its commitment to equities. Executives at the company have said they have pushed back the time line they originally set for reaching their goal in stock underwriting, and they have tempered their ambition of becoming one of the top three firms in that field.
"It may imply that they are looking critically at the equities business," said Brock Vandervliet, an analyst at Lehman Brothers. "Given this environment, potentially they may be looking to do something more dramatic."
Robert Albertson, the chief strategist at Sandler O'Neill & Partners LP, said several Wall Street firms came to the realization last year that the spectacular volumes achieved during the late-1990s market bubble were not likely to be repeated soon, if ever. Many of these firms moved to downsize their equity divisions as a result.
"There is just too much depth and too much duplication," Mr. Albertson said. "The game changed. The bigger mistake would be to continue on, hoping for a market revival."
A Morgan Chase spokeswoman declined to comment on Mr. Capossela's departure or rumors that he had a lucrative multiyear employment contract.
In a memorandum to employees Wednesday, Steven Black, the head of global equities at Morgan Chase and deputy head of investment banking, named Carlos Hernandez to head the equities business in the Americas.
