Merrill Lynch, Pierce, Fenner & Smith Incorporated, doing business as Merrill, and previously branded Merrill Lynch, is an American investment management and wealth management division of Bank of America. Along with BofA Securities, the investment banking arm, both firms engage in prime brokerage and broker-dealer activities. The firm is headquartered in New York City, and once occupied the entire 34 stories of 250 Vesey Street, part of the Brookfield Place complex in Manhattan. Merrill employs over 14,000 financial advisors and manages $2.8 trillion in client assets ($3.4 trillion for Global Wealth and Investment Management).[2] The company also operates Merrill Edge, a division for investment and related services, including call center counsultancy.
Prior to 2009, the company was publicly owned and traded on the New York Stock Exchange. Merrill Lynch & Co. agreed to be acquired by Bank of America on September 14, 2008, at the height of the 2008 financial crisis, the same weekend that Lehman Brothers was allowed to fail. The acquisition was completed in January 2009[3] and Merrill Lynch & Co., Inc. was merged into Bank of America Corporation in October 2018, with certain Bank of America subsidiaries continuing to carry the Merrill Lynch name, including the broker-dealer Merrill Lynch, Pierce, Fenner & Smith.[4][5] In 2019, Bank of America rebranded the unit to "Merrill".[6]
Merrill Lynch rose to prominence on the strength of its network of financial advisors, sometimes referred to as the "thundering herd", that allowed it to place securities it underwrote directly.[7] In contrast, many established Wall Street firms, such as Morgan Stanley, relied on groups of independent brokers for placement of the securities they underwrote.[8] It was once known as the "Catholic" firm of Wall Street[9] and most of its executives were Irish Catholics.[10]
History
Founding and early history
The company was founded on January 6, 1914, when Charles E. Merrill opened Charles E. Merrill & Co. for business at 7 Wall Street in New York City.[11] A few months later, Merrill's friend, Edmund C. Lynch, joined him, and in 1915 the name was officially changed to Merrill, Lynch & Co.[12] At that time, the firm's name included a comma between Merrill and Lynch, which was dropped in 1938.[13] In 1916, Winthrop H. Smith joined the firm.
In 1921, the company purchased Pathé Exchange, which later became RKO Pictures. In 1926, the firm acquired a controlling interest in Safeway Inc.
Regulatory actions
Orange County settlement
In 1998, Merrill Lynch paid Orange County, California $400 million (~$ in ) to settle accusations that it sold inappropriate and risky investments to former county treasurer Robert Citron.[64] Citron lost $1.69 billion, which forced the county to file for bankruptcy in December 1994.[64] The county sued a dozen or more securities companies, advisors and accountants, but Merrill settled without admitting liability, paying $400 million of a total $600 million recovered by the county.[65][66]
Analyst Research settlement
In 2002, Merrill Lynch agreed to pay out $100 million (~$ in ) for publishing misleading research.
See also
- Broker-dealer
- Calibuso, et al. v. Bank of America Corp., et al.
- Credit crunch
- Liquidity crisis
- Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, a 2006 Supreme Court case involving securities fraud claims
- Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, a 2016 Supreme Court case involving naked short selling claims
- List of UK judgments relating to excluded subject matter
- Primary dealer
Further reading
External links
References
- Bank of America Corporation Annual Report 2012 Bank of America Corporation, retrieved 22 December 2013^
- Become a financial advisor with Merrill Merrill Lynch^
- Jan 2009 – see Crash of the Titans by Greg Farrell^