The troubled Wall Street investment bank Merrill Lynch, now has a new chairman and chief executive - John Thain, the chief executive of NYSE Euronext. He replaces Stan O’Neal who stepped down two weeks ago after the company announced that it was facing $7.5 billion write-down on its sub prime-related holdings.
News of Mr. Thain’s appointment pushed up the price of Merrill Lynch’s share by 2%. A former co-president of Goldman Sachs, Mr. Thain worked in the bank’s bond department and later headed the risk management as chief financial officer. Mr. Thain is further credited with transforming NYSE since he took over as its chief executive in January 2004.
Last year Merrill was the largest issuer of collateralized debt obligations, based on sub prime mortgage securities and has been left with large holdings of highly illiquid investments. Merrill is facing write-down on these holdings in the fourth quarter and is facing lawsuits from investors alleging it invested their money in risky sub prime securities.
Mr. Thain faces a rather daunting task of setting Merrill’s house in order.
Source:ft
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