July 31 (Bloomberg) -- Morgan Stanley, the second-biggest U.S. securities firm by market value, is spending some of an estimated $1 billion saved by cutting jobs this year to add senior bankers and trading executives from rival firms.

Luc Francois, the former head of equities at Societe Generale SA, will join New York-based Morgan Stanley to run European equities and global equity derivatives, said a person familiar with the matter. Thomas Wong from Bear Stearns Cos. will run proprietary trading and Eric Cole, also from Bear Stearns, will oversee distressed sales, trading and research, said the person, who declined to be identified because the recruits haven't been formally announced.

Morgan Stanley has spent about $400 million of the $1 billion preserved by cutting about 4,440 jobs this year to attract senior executives, the person said. Wong and Cole became available after Bear Stearns collapsed in March, while Francois left France's Societe Generale after trader Jerome Kerviel was accused of unauthorized trading that led to 4.9 billion euros ($7.6 billion) in losses. Morgan Stanley concluded that Francois bore no responsibility for the losses, said the person.

``It's wise for banks with good financial positions to build up their teams opportunistically,'' said Andy Mantel, managing director of Pacific Sun Investment Management Ltd. in Hong Kong. ``There will be lots of investment opportunities with all the market turmoil.''

Jeanmarie McFadden, a Morgan Stanley spokeswoman in New York, declined to comment.

SocGen Veteran

Francois, who spent 20 years at Societe Generale, will be based in London and start on Sept. 8, according to an internal memo obtained by Bloomberg. He will report to Fabrizio Gallo and to Colin Bryce, the memo said.

Morgan Stanley also hired James Brown, Merrill Lynch & Co.'s global head of commodities risk management, to oversee commodities risk, the person said. He will report to Keishi Hotsuki, a former head of market risk management at Merrill who now runs Morgan Stanley's market risk team, the person said.

Chris Iannaccone will join from JPMorgan Chase & Co., where he was global head of chemicals investment banking, to be a senior chemicals banker, the person said. Morgan Stanley also recruited Michael Eck from Citigroup Inc. to win more deals from retailers, the person said.

The Financial Times reported the hires earlier on its Web site.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net

Last Updated: July 31, 2008 01:32 EDT