Good Riddance to Merrill CEO

The so-called subprime crisis did evolve on its own and was not directly caused by any one individual or even small group of individuals, but what is clear is that absentee management at a wide range of Wall Street firms aided and abetted the growth and deterioration of the whole subprime credit bubble. The CEOs of these firms may not have led the charge into the swamp, but they were certainly AWOL when it came to supervising the kids who were leading the charge. I am glad to see that the board of directors of Merrill Lynch is at least belatedly recognizing their own responsibility and reportly in the process of sacking their CEO, Stan O'Neil, according to an article in The Wall Street Journal by Randall Smith entitled "O'Neal Out as Merrill Reels From Loss - Startled Board Ditches A Famously Aloof CEO; The Revenge of 'Mother'."

The real kicker is that none of this would have happened if Merrill Lynch had "stuck with its knitting" and focused on its brokerage and wealth management businesses instead of fantasizing that they were an investment bank of the likes of Goldman Sachs. It was the same kind of sloppy thinking that led them into investment banking that in turn led them down the slippery slope to gambling their own money on subprime mortgages. And that sloppiness of thinking in turn led them to placing really large bets on subprime securities.

My advice to Merrill's board: dismember the company and refocus on the core brokerage and wealth management business.

My advice to the incoming Merrill CEO: sack and replace the entire board of directors with one that is laser-focused on brokerage and wealth managment. Rebuild a brand name that Main Street America can respect rather than perpetuate one of the shameless Wall Street "club" members.

-- Jack Krupansky