Merrill Lynch says it has discovered "trading irregularities" in its
London accounts that media reports say total several hundred million
dollars in undisclosed losses.
The company revealed it was
conducting an investigation following a report in The New York Times
newspaper Friday that a London-based Merrill employee, Alexis Stenfors,
was stripped of his trading authority last month after losing more than
Other traders may have lost hundreds of millions more on the derivatives markets.
company said in a statement Friday that it informed British regulators
immediately after finding discrepancies in "certain trading positions"
and that the "risks surrounding possible losses are under control."
The losses came ahead of the investment firm's takeover by Bank of America.
of America shareholders approved the merger of the two companies on
December 5, unaware that Merrill's pending losses for the fourth
quarter of 2008 would total $13.3 billion.
The new allegations -
and the timing of their disclosure - will further add to the
controversy surrounding Merrill's payment of $3.6 billion in bonuses to
its executives just before the Bank of America deal was sealed.
the extent of Merrill Lynch's financial problems became clear, Bank of
America was forced to ask for a second government bailout to cover its
absorbed losses in connection with the merger. It has accepted $45
billion in government aid since October.
Some information for this report was provided by AFP, AP and Reuters.