The Wall Street Journal-20080129-Role May Grow for Fleming at Merrill

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Role May Grow for Fleming at Merrill

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NEW YORK -- Merrill Lynch & Co. co-President Ahmass Fakahany is retiring, clearing the way for Gregory Fleming to take over as sole president of the Wall Street firm.

The move was widely expected and was reported earlier this month in The Wall Street Journal. In November, after Merrill's disastrous third quarter, the firm awarded responsibility for all revenue-generating activities and risk management to the 44-year-old Mr. Fleming.

He also played an important role in lining up the more than $12 billion the firm has raised in recent months to shore up its capital base.

Mr. Fakahany was best known in the investor community as Merrill's chief financial officer between 2002 and 2005. As well, Mr. Fakahany formerly shared oversight of Merrill's bond-market activities, including a buildup of its position in collateralized debt obligations, pools of securities backed by assets such as subprime mortgages to risky borrowers, which plummeted in value this year and got the firm into trouble.

Last week, still reeling from mortgage-related losses, Merrill reported a fourth-quarter net loss of $9.83 billion, the worst in its 94-year history, on write-downs totaling about $15 billion. The company's write-downs totaled $23.4 billion in the second half of 2007.

Chairman and Chief Executive Officer John A. Thain said yesterday that Mr. Fakahany, 49 years old, had informed him upon his arrival as top executive in mid-November that Mr. Fakahany intended to leave Merrill in the first quarter and pursue other interests. Mr. Fakahany is a longtime ally of ousted Merrill CEO Stan O'Neal.

When Mr. Thain took over, Mr. Fakahany's role was limited to support functions, finance and human resources.

Mr. Thain called Mr. Fakahany "the consummate professional" who "provided leadership during this challenging period."