Excerpt: Merrill Lynch’s Greg Fleming: Sources Say No Legal Trouble Ahead

  • Merrill’s loss-making performance led to the departures of former chief executive Stan O’Neal and former co-president Ahmass Fakahany. But many thought the changes at Merrill would go further. Peter Sorrentino, who helps manage a $12 billion fund that has invested in Merrill told Bloomberg that: “The whole executive suite needs to change. It wasn’t one person’s bad decisions — there are a lot of fingerprints on this murder.”
  • In the aftermath of Enron’s accounting scandal and collapse, four top Merrill executives—including the heads of the investment bank division and of the leasing finance group—found themselves targeted by prosecutors. They were convicted at trial received multi-year sentences. Later a federal appeals court overturned the convictions of the executives, saying the charges were flawed.
  • Fleming led Merrill’s push into private equity, a business that contributed billions to Merrill’s bottom line when the going was good but proved costly when the bank had to write-down leveraged loans left on its books when investor appetite dried up. He is praised for arranging the deal that allowed Merrill’s to acquire 49.8 percent stake in BlackRock.
  • But Fleming had a role in the controversial plan to merge with Wachovia, a move that many within Merrill believe would have been disastrous. O’Neal’s conversations with Wachovia chief Ken Thompson, conducted without getting the approval of Merrill’s board, is considered a “a major breach of corporate protocol” according to the New York Times.

Source: Dealbreaker.com