Company spokesman Ray O'Rourke denies that the executive changes signal a reevaluation of long-term strategy. He also declines to comment on the internal conflict-of-interest probe, except to say it is a work in progress with no set time limit. The company is going "product by product and business by business," O'Rourke says, systematically examining each for problems. But some observers say that unless Dinallo makes prompt and verifiable changes in things like broker compensation and disclosure, his presence won't keep the regulators off Morgan Stanley's back. One reason is that Purcell himself has annoyed them. Last April, along with 10 other large firms, Morgan Stanley agreed to a $1.4 billion settlement after state and federal regulators alleged that research analysts had issued biased stock ratings to attract or keep investment banking clients. Morgan Stanley's share of the settlement came to $125 million, a sum many considered a mere wrist-slap.