Merrill to shut down subprime lending unit-CNBC

What’s $34 Billion on Wall Street?

UNDER the stewardship of Dow Kim and Thomas G. Maheras, Merrill Lynch and Citigroup built positions in subprime-related securities that led to $34 billion in write-downs last year. The debacle cost chief executives their jobs and brought two of the world’s premier financial institutions to their knees.

In any other industry, Mr. Kim and Mr. Maheras would be pariahs. But in the looking-glass world of Wall Street, they — and others like them — are hot properties. The two executives are well on their way to reviving their careers, even as global markets shudder at the prospect that Merrill and Citigroup may report further subprime losses in the coming months. Read more..
http://www.nytimes.com/2008/01/27/business/yourmoney/27kim.html?_r=1&em&ex=1201410000&en=1b5f65e4f3c47453&ei=5087%0A&oref=slogin

Merrill Lynch gets fresh $6.6bn injection

Merrill Lynch on Tuesday said it had raised $6.6bn by selling preferred shares to investors from the Middle East and Asia, as part of a second injection of funds to help shore up the US investment bank’s capital base

The bank said it would issue preferred stock to ”long-term investors”, with the bulk being taken up by the Kuwait Investment Authority (KIA). Mizuho Corporate Bank, a subsidiary of Japan’s second largest bank, is taking about $1.2bn and the Korean Investment Corporation (KIC), $2bn. Read more..
http://www.ft.com/cms/s/0/d6d7b30e-c361-11dc-b083-0000779fd2ac.html?nclick_check=1

Merrill Lynch targetted in share investigation

The US Securities and Exchange Commission (SEC) is investigating whether Merrill Lynch used knowledge about some of the share trades the brokerage conducted for its clients to make a profit on its own account.

The US watchdog’s probe centres on whether some current and former Merrill Lynch executives engaged in a practice known as "front running" which is when a brokerage receives a large order to buy or sell a particular share from a client and quickly executes its own trade in the same stock before addressing the client’s transaction.

Merrill Lynch reported an $8.4 billion (£4.2 billion) writedown in the third quarter, much of it relating to mortgage investments. It is expected to announce a further $10 billion to $20 billion sub-prime-related losses when the brokerage reports its fourth quarter figures.

Merrill Lynch is also expected to announce on Thursday that it has agreed a second capital injection, of about $4 billion, from investors thought to include the Kuwait Investment Authority. The infusion would follow a $6.4 billion investment last month from Temasek, the Singapore government-owned fund and Davis Selected Advisors, the US asset manager.
Read more..
http://business.timesonline.co.uk/tol/business/markets/united_states/article3186660.ece