I’m not one to hand out financial advice, but this strikes me as a red flag. Emphasis added.
Merrill Lynch’s decision to name John Thain as its new chief executive came after the firm’s first choice, BlackRock CEO Larry Fink, demanded that Merrill make a full accounting of its subprime exposure, CNBC has learned.
Thain, who has been CEO of NYSE Euronext for nearly four years, will succeed Stanley O’Neal, who stepped down in late October after Merrill reported huge writedowns from subprime-related losses.
Merrill’s selection of Thain was a surprise because the firm had recently indicated to Fink that the job was his if he wanted it. CNBC has learned that Fink said he would take the job but only if Merrill did a full accounting of its subprime exposure. At that point, Merrill, which owns 49% of BlackRock, moved in a different direction and decided to go with Thain instead.
A Merrill spokesman told CNBC that “Merrill Lynch can confirm that Laurence Fink was not offered the job of CEO at Merrill Lynch.”
If you have accounts with Merrill Lynch, now would be a really good time to close them out. You don’t refuse to make a full accounting like that.