NEW YORK (Reuters) - Merrill Lynch & Co Inc named NYSE Euronext Chief Financial Officer Nelson Chai as its new CFO on Monday, less than a month after bringing in NYSE CEO John Thain to clean house.
By Dan Wilchins
NEW YORK (Reuters) - Merrill Lynch & Co Inc named NYSE Euronext Chief Financial Officer Nelson Chai as its new CFO on Monday, less than a month after bringing in NYSE CEO John Thain to clean house.
The appointment, a big step in Chai's rapid rise through Wall Street's ranks, represents the latest management change stemming from the ongoing subprime mortgage meltdown.
Chai, 42, takes over from Jeffrey Edwards starting December 10. Edwards, who told investors on a conference call last quarter "we have very effective risk management," will "assume a new operating role" at Merrill, the company said, adding that an announcement about the role would be made soon.
!ADVERTISEMENT!Thain, a former Goldman Sachs Group Inc co-president, took over Merrill, the largest U.S. brokerage, after more than $8 billion of mortgage and credit losses led to the ouster of then-CEO Stanley O'Neal.
"This is normally what you would expect ... that Thain would bring some people that he's worked with over to join him," said Jim Huguet, co-CEO of investment management firm Great Companies LLC. "If I'm CEO, if there's someone I can trust, that may be as important as having all the skills and experience of running an operation like that."
Others wondered if naming a new CFO so quickly signals that more trouble is ahead for Merrill Lynch.
"Thain is saying 'we're not finished with these problems,' and he wants the strongest financial team he can get," said Michael Holland, founder of Holland & Co, which oversees more than $4 billion of client assets.
In a note last week, Credit Suisse analyst Susan Roth Katzke said Merrill could take a $9 billion after-tax subprime mortgage write-down, based on valuations implied by E*Trade Financial Corp's recent mortgage portfolio sale to hedge fund Citadel Investment Group.
Chai told Reuters it was premature to comment on potential write-downs, and that he has not yet combed through Merrill Lynch's books.
"I am comfortable with where things sit. I understand that there are some things that have to be done in the near term, but I think the rest of the business is performing quite well," Chai said.
"I certainly don't have perfect or full information."
FAST RISE
Chai became NYSE CFO in January 2006. He had been the chief numbers cruncher for Archipelago Holdings, the electronic stock trading network acquired by the NYSE, from 2000 to 2005. He is one of the highest-ranking Asian-Americans on Wall Street.
Edwards joins a growing list of Wall Street executives to lose their jobs as banks report massive write-downs and trading losses triggered by the plunging value of mortgage securities and riskier corporate loans.
Merrill Lynch's write-offs in October, which were about $3 billion greater than the company had previously forecast, also cost O'Neal his job as CEO.
Last week, Morgan Stanley ousted Co-President Zoe Cruz, and Citigroup Inc said on November 4 Chief Executive Chuck Prince had resigned.
NYSE Euronext said its deputy CFO, Joost van der Does de Willebois, will become acting CFO on December 10. Van der Does de Willebois has also headed NYSE Euronext's Amsterdam market. Bruno Colmant, current head of NYSE Euronext's European affairs and head of its Belgian market, will become deputy CFO.
(Additional reporting by Joseph A. Giannone, Lilla Zuill, Megan Davies, and Jonathan Keehner; Editing by Jeffrey Benkoe and Braden Reddall)
