Big Board Chairman Offers Help to Quickly Resolve Merrill Case
Amid a wide-ranging probe into Merrill Lynch & Co .'s (MER) research practices by New York Attorney General Eliot Spitzer, New York Stock Exchange Chairman Richard Grasso has offered his assistance in trying to bring a quick resolution to the case, which has roiled the Wall Street brokerage community, Monday's Wall Street Journal reported.
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In an interview, Mr. Grasso said he telephoned Mr. Spitzer on Friday offering to set up a meeting between the attorney general and Merrill Chief Executive Officer David Komansky as a way of quickly concluding the probe into the firm's research. Mr. Grasso, who also provides front-line regulation of firms like Merrill as chairman of the Big Board, says he is concerned about the growing perception among small investors that "Wall Street is totally corrupt."
"I have a role to play as a regulator to get the bad people out of the business and I also have a role to play because America doesn't feel good about the securities business," he added. Mr. Grasso, one of the most respected figures on Wall Street, said that Mr. Spitzer is "doing the right thing" in his probe. "I support him; bad people and bad practices don't belong in the business."
A Merrill spokesman had no comment on Mr. Grasso's call. "I don't have Dick Grasso's phone logs," said spokesman James Wiggins. "Dick Grasso doesn't represent Merrill Lynch." But the move by Mr. Grasso could provide a big boost to Merrill, which has seen the price of its stock drop nearly 20% since Mr. Spitzer early last month announced the findings of a 10-month probe into the firm's research practices. Mr. Spitzer says he has compelling evidence that the firm purposely misled small investors, with overly optimistic research, to buy stocks of companies that also handed the firm lucrative banking fees. He has threatened filing civil and possibly criminal charges against the firm, and has expanded his investigation to include nearly every major firm on Wall Street.
Merrill, for its part, has denied the charges, and for nearly a month, has haggled over a settlement deal with the attorney general's office. On Friday, talks between the two sides continued to sputter over Mr. Spitzer's demands that Merrill completely sever its research unit from its investment-banking arm. People close to the talks say Merrill could make a settlement offer as early as today after Mr. Spitzer on Friday threatened to hold public hearings and call both current and former Merrill executives as witnesses. Merrill had no comment on the negotiations. |
