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Merrill CEO Contrite in Memo

May 13, 2003|From Bloomberg News

Merrill Lynch & Co. Chief Executive Stanley O'Neal told employees Monday that he takes seriously his firm's settlement with securities industry regulators on conflict-of-interest claims after authorities expressed concern Wall Street executives weren't sufficiently contrite.

"I get it, and I believe all of us at Merrill Lynch get it," O'Neal said in a memo sent to Merrill's 49,600 employees.

Merrill was one of three firms whose misconduct rose to the level of fraud, according to the settlement announced last month with securities regulators.

When the settlement was announced, New York Atty. Gen. Eliot Spitzer referred to a Wall Street Journal opinion piece written by O'Neal as an example of some chief executives attempting to minimize their firms' guilt. He didn't mention O'Neal by name.

"We have seen an article in a major publication by a CEO who said this is merely an effort to eliminate risk from the marketplace," Spitzer said. "What I'd tell you is to reflect very carefully. You took no risk. The risk was all on the part of the small investor who relied on your research."

The 10 firms that participated in the settlement neither admitted nor denied wrongdoing.

In his op-ed, O'Neal didn't mention the settlement. He wrote: "If we attempt to eliminate risk -- to legislate, regulate, or litigate it out of existence -- the ultimate result will be economic stagnation, perhaps even economic failure."

Merrill spokesman Tim Cobb confirmed the memo's authenticity.

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