State of Merrill Lynch up to its acquisition Print E-mail
Written by Bob   
The story within the story here is what was the state of Merrill Lynch leading up to the acquisition, and how did it get that way. A separate and rigorous inquiry is needed into how they could have taken on so much risk? The general public, even the press and congress, have become desensitized to the collapse of ML, in part, because the notion of taking on to much risk and possessing toxic assets is not news. As well, the manner in which ML revealed its losses, by eight and ten billions of dollars at a time, has somewhat softened the blow of their having required...if you count what was requested after the B of A, merger...over $85 billion dollars from the federal government. In the interest of disclosure, I worked there for many years.

As the firm evolved away from what I would call corporate focused executives who worried about the enterprise, and towards trading floor and finance types who worried about the P and L of institutional business units, and the remuneration for individuals and themselves associated with these businesses, the internal culture became as toxic as the assets that would later bring it down. The big time trading heads would look down their noses at retail and asset management businesses and concentrate on ways to undermine them, and the senior executives who ran them. They succeeded. Like anything of this nature, it took time. Orange County and Enron, if you check the records, show a firm unwilling to open its books and admit its transgressions, as had been its culture, instead stonewalling with legally permissible, though somewhat incredible, courtroom maneuvers, going so far as appeal a judge's decision to publish grand jury testimony which he felt would benefit the public good if done. Again, this was the firm's right, but what was it worried about. lastly, the palace coup that put in place the men and women who brought down the firm will, or should, be studied at Harvard Business School, or maybe political science departments, for the manner in which the ascending chairman consolidated the chairmanship and the presidency, got rid of every rival and most direct reports, filled key roles with weak sycophants, and dismissed the very two men on the board who engineered the coup for him.

In fairness, I have an axe to grind with the way the firm was run during may last years, and my last days were spend with a heavy heart. That said, I loved the company and it was as much an influence on my life as my family. Now, this is my take, my opinion. But, nonetheless, here we are: Careers ruined. Life savings savaged. Jobs lost...and a country put at greater risk by financial mismanagement, than the threats of nuclear power and decease combined. Its time someone looked into what happened at Merrill Lynch, and hold those responsible to account.