10/20/2008 05:12 am ET Updated May 25, 2011

New York Times Retracts Morgan Stanley Chief's "We're Not Gonna Make It" Quote

The New York Post's Paul Tharp Friday reports that the New York Times has retracted a salacious quote about the Wall Street crisis that appeared in a front-page article Thursday:

The New York Times is still trying to figure out the old newspaper truism, "Never let facts get in the way of a good quote."

The editors of The Times ran an embarrassing note yesterday discrediting one of its most attention-getting stories about the Wall Street crisis: that troubled Morgan Stanley wanted a quick marriage with equally troubled Citigroup to save their respective hides.

It turns out the sole quote on which the tale was based was never uttered, the editors' note admitted.

The original story said Morgan Stanley chief John Mack was talking with Citigroup head Vikram Pandit, when Mack remarked, "We need a merger partner, or we're not going to make it."

Both banks emphatically denied the remark, and after an internal probe, so did the paper.

The NYT correction:

Editors' Note: September 19, 2008

A front-page article on Thursday reported on discussions the investment bank Morgan Stanley has had with possible merger partners. It cited two people who were said to have been briefed on a conversation in which John J. Mack, chief executive of Morgan Stanley, had told Vikram S. Pandit, Citigroup's chief executive, that "we need a merger partner or we're not going to make it."

After the article appeared, Morgan Stanley vigorously denied that Mr. Mack had made the comment, as did Citigroup, which had declined to comment on Wednesday. The two people whom The Times cited now say that because they were not present during the discussions, they cannot confirm that Mr. Mack in fact made the statement. The Times should have asked Morgan Stanley for comment and should not have used the quotation without verifying that the two people had direct knowledge of any comments made by Mr. Mack.

Read the correction and the article here.