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Merrill Lynch

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This article is part of the Coal Issues portal on SourceWatch, a project of CoalSwarm and the Center for Media and Democracy. See here for help on adding material to CoalSwarm.

For post-2008 purchase information please see Bank of America.

Merrill Lynch, purchased by Bank of America in 2008, was a large financial services company that had revenues of $70 billion and profits of $7 billion in 2006. It provided financial services for private, institutional, and government clients. It worked with mutual funds, insurance, annuities, trusts, clearing services as well as investment banking and brokerage. [1]

The company operated in the United States, Canada, Europe, the Middle East, Africa, the Pacific Rim, and Latin America. Headquartered in New York City, USA, it was founded in 1820. [2]

Coal investments

Merrill Lynch is a major financier of new coal plant construction. New coal-fired power plants being funded by the company include:

Protests against coal investments

Apr. 13, 2007: Blockade of Asheville Merrill Lynch

On April 13, 2007, two people calling themselves members of the "Climate Justice League" entered a Merrill Lynch building in Asheville, North Carolina, dumped a sack of coal in the lobby, and used a bicycle lock to blockade the door. The activists demanded that Merrill Lynch stop funding mountaintop removal coal mining companies such as Massey Energy. No arrests were reported.[3]

Financial crisis and the bailout

Role in the crisis

In 1975, the SEC’s trading and markets division ruled that investment banks must maintain a debt-to-net capital ratio of less than 12 to 1. In 2004, following extensive lobbying by the investment banks, the SEC under chairman Christopher Cox authorized five investment banks to develop their own net capital requirements. This enabled investment banks to push borrowing ratios to as high as 40 to 1.[4] These five investment banks were Goldman Sachs, Morgan Stanley, Lehman Brothers, Bear Stearns, and Merrill Lynch. This very high debt-to-reserves helped lead to the financial crisis of 2008 by weakening the ability of these institutions to recover from losses incurred when the risky CDO and CDS bets failed.[5][6]

Lee A. Pickard, who had been Director of the SEC’s Division of Market Regulation when the 1975 12-1 rule was ordered, said of the change, "The SEC modification in 2004 is the primary reason for all of the losses that have occurred."[7]

Political influence

Campaign contributions

E. Stanley O'Neal, then CEO of Merrill Lynch, was a Bush Ranger having raised at least $200,000 for Bush in the 2004 presidential election. [8]

Merrill Lynch gave $184,150 to federal candidates in the 2006 election through its political action committee - 47% to Democrats and 53% to Republicans. [9]

Decade-long campaign contribution total (1998-2008): $9,977,724[10]

The 2008 top recipients of campaign contributions were:[10]
1. John McCain (R) $360,620
2. Barack Obama (D) $264,720
3. Rudy Giuliani (R) $210,275
4. Hillary Clinton (D) $202,568
5. Mitt Romney (R) $172,025

Lobbying

The company spent $3,952,760 for lobbying in 2006. $2,445,000 went to eight lobbying firms with the remainder being spent using in-house lobbyists. [11]

Decade-long lobbying expenditure total (1998-2008): $59,076,760[10]

2008 Top Lobbying Expenditure Recipients:[10]
1. Merrill Lynch $4,700,000
2. Ernst & Young $604,000
3. Johnson, Madigan et al $240,000

Contact details

4 World Financial Center
250 Vesey St.
New York, NY 10080
Phone: 212-449-1000
Fax: 212-449-9418
Web: http://www.merrilllynch.com

Articles & resources

References

  1. Merrill Lynch Profile, Hoovers, accessed July 2007.
  2. Merrill Lynch Profile, Yahoo Finance, accessed July 2007.
  3. Climate Justice League Strikes Merrill Lynch, Infoshop News, April 13, 2007.
  4. Stephen Labaton, Agency’s ’04 Rule Let Banks Pile Up New Debt, NY Times, October 8, 2008. Retrieved October 9, 2009
  5. Julie Satow, Ex-SEC Official Blames Agency for Blow-Up of Broker-Dealers, NY Sun, September 18, 2008. Retrieved October 9, 2009
  6. Ben Protess, ‘Flawed’ SEC Program Failed to Rein in Investment Banks, ProPublica, October 1, 2008. Retrieved October 9, 2009
  7. Julie Satow, Ex-SEC Official Blames Agency for Blow-Up of Broker-Dealers, NY Sun, September 18, 2008. Retrieved October 9, 2009
  8. Pioneers and Rangers, Texans for Public Justice, accessed July 2007.
  9. 2006 PAC Summary Data, Open Secrets, accessed July 2007.
  10. 10.0 10.1 10.2 10.3 "Sold Out: How Wall Street and Washington Betrayed America", accessed October 2009.
  11. Merrill Lynch lobbying expenses, Open Secrets.

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