Bank Of America Probing Traders' Books

 

Saturday, Mar 07,2009, 2:59:36 PM   Click:

Bank of America probing traders' books
U.S. financial giant Bank of America is investigating how Merrill Lynch traders had huge losses not readily apparent when it bought the firm, a source said.

Shareholders were also unaware of the extent of Merrill Lynch's losses when they approved of the merger between the two companies on Dec. 5, The New York Times reported Friday.

In London, currency trader Alexis Stenfors lost $120 million in currency trades, the Times said. In spite of this, Stenfors was awarded a sizable bonus check, as his records showed he was $120 million ahead on the year, the newspaper said.

Merrill Lynch lost $13.8 billion in the fourth quarter, a sum that helped push Bank of America to accept a second emergency bailout from the federal government.

There is a massive cultural disconnect in the trading area, Brad Hintz, an analyst with Sanford C. Bernstein & Company told the Times. You have Bank of America, where it would seem foreign to ride a motorcycle without wearing a helmet and at Merrill, the legacy (of risk) is still there, he said.

adminBut, Bank of America has begun investigating traders' books, like Stenfors', when they are on vacation, the newspaper said.

Copyright © 2009 United Press International U.S. financial giant Bank of America is investigating how Merrill Lynch traders had huge losses not readily apparent when it bought the firm, a source said. Shareholders were also unaware of the extent of Merrill Lynch's losses when they approved of the merger between the two companies on Dec.