NEW YORK — Speculation swirled Friday that the chief executive of Merrill Lynch & Co. could be ousted from his job in coming days, making him the highest-ranking Wall Street casualty of the sub-prime mortgage meltdown.
The possible departure of CEO Stan O'Neal raised the question of whether the jobs of other chief executives could be in jeopardy.
None of Wall Street's biggest bosses have lost their jobs in the yearlong home-loan crisis despite mortgage-related securities losses at their companies totaling about $25 billion.
O'Neal's future at the largest U.S. brokerage was thrown into doubt Wednesday after New York-based Merrill disclosed a much bigger-than-expected loss on mortgage securities. His status appeared to weaken further Friday after a report said O'Neal, who is also Merrill's chairman, was in hot water with the rest of his board because he approached a rival bank about a potential merger without telling his fellow directors.
"I think he's gone," said Jeff Arricale, manager of the T. Rowe Price Financial Services fund.
Merrill's stock shot up $5.19, or 8.5%, to $66.09 in the wake of a report that O'Neal could be forced out as early as this weekend.
Potential successors are said to include Laurence Fink, chief executive of money manager BlackRock Inc., which Merrill bought a stake in last year; Robert McCann, the head of Merrill's huge brokerage force; and John Thain, the chief of NYSE Euronext Inc., the parent company of the New York Stock Exchange.
Rumors also spread that Merrill's board would put the firm up for sale, though several analysts called that unlikely.
A Merrill spokeswoman declined to comment.
O'Neal, 56, joined Merrill in 1986 and has been CEO for nearly five years. He is the highest-ranking African American on Wall Street, and the first African American to run a major investment bank.
"At the end of the day they are responsible for what the people below them do," said Anton Schutz, manager of the Burnham Financial Services Fund. "We have seen very senior people at those firms get the boot. We have yet to see a CEO get the boot."
Though most large Wall Street firms have recorded deep losses tied to the sub-prime crisis and resulting seizure of global credit markets, Merrill has been hit hardest. Its $7.9-billion mortgage-bond write-down was the largest on Wall Street, substantially more than the $4.5-billion hit that Merrill forecast less than three weeks earlier.
