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Hitting up the family…

Say you needed a $2.39 million mortgage for some fabulous house you absolutely had to have. But you couldn’t secure the mortgage on your own — you needed someone to co-sign. Luckily for Shereen Abdel-Meguid, her brother was not only willing to co-sign, but also apparently helped her secure the mortgage from his employer, Morgan Stanley (MWD), where the company’s proxy describes him as an executive officer (though he’s not in the top five). That wasn’t the only hefty mortgage Morgan Stanely arranged for a family member. Michael Purcell, a son of Chairman and CEO Philip J. Purcell also had an outstanding mortgage for $1 million, and like Ms. Abdel-Meguid, both received discounts on the origination fees. Both loans, the proxy notes, are similar to those that would be granted to anyone else, so the next time you need a super jumbo mortgage, be sure to call Morgan Stanley. The proxy also notes two limited partnerships with two other Purcell sons — David and Paul — and helpfully adds that dad owns more than 10% of the limited partnership interests and that the company is the primary broker for the limited partnerships. The proxy adds that the two partnerships generated less than $1 million in fees for Morgan Stanley, but doesn’t say how much less. Given Morgan Stanley’s size, it’s not the numbers that are so eye-popping here. It’s the fact that given all the problems with cozy related party deals over the past few years, Morgan Stanley’s executives wouldn’t simply stear their relatives to some other company to avoid any questions — or potential problems — over these sorts of deals. After all, if the mortgages and investment products are rock-solid, why wouldn’t other companies actively compete for a piece of the business?