Stan O''Neal Merrill Lynch''s beleaguered CEO to go

29 October 2007

Media reports said the CEO''s departure would likely be announced on Monday 29 October

After a $7.9-billion write-down related to subprime mortgages and O''Neal''s unauthorised overture to merge Merrill with Wachovia Bank, media reports said the board of Merrill Lynch had reached a broad consensus on Friday for his dismissal. That makes him the highest-ranking casualty of the global credit crisis so far.

O''Neal rose to power five years ago, and was known for shaking up the company''s top management. He put greater emphasis on riskier bets for higher earnings, rather than the unlucrative safety of just selling stocks.

His strategy brought Merrill Lynch record results during the market''s peak over the past two years, but equally heavy losses during the tumultuous third quarter after the sub-prime crisis triggered a credit squeeze.

O''Neal''s rise through the company was unique not only for its high speed, but also for the man''s extraordinary ability to be at the centre of major financial disruptions, without any significant blame attaching to him.

He was a senior banker in the junk bond division when Merrill incurred a $470 million write-down. He was a co-head of Merrill''s institutional business in 1997, just a few months before the Asian financial crisis. He was chief financial officer in 1998, when the firm suffered a quarterly loss because of losses in bond trading and exposure to troubled hedge fund Long Term Capital Management.