U.S. Government Looking At Merrill Lynch

Dow Jones’ marketwatch.com looks here at the SEC’s and DOJ’s widening inquiries into possible wrongdoing at Merrill Lynch–in connection with the sub-prime mess. Yours truly is quoted in the piece, and quoted out of context. Reporter Riley McDermid called me on Friday and asked how likely it was that Merrill Lynch would be indicted. I responded that this was a very unlikely scenario in light of the debacle created by the government’s indictment of Arthur Anderson & Co. (If you recall, the government’s indictment of Anderson effectively shut the company down, throwing thousands of totally innocent people out of work. Anderson’s subsequent conviction was later overturned by the U.S. Supreme Court.) I also told McDermid that Merrill Lynch would gladly cooperate with the government, if necessary by throwing former top officers to the wolves, in order to avoid indictment. In McDermid’s article, co-authored by Greg Morcroft, I am quoted as suggesting that Merrill Lynch’s employees won’t be indicted.  That is a different question altogether. If  the DOJ thinks it has found fraud in connection with Merrill Lynch’s marketing or accounting for sub-prime mortgages, it is in fact quite likely that employees will be indicted, although they will probably be former employees by the time charges are filed.