KEY POINTS:
Merrill Lynch, the US brokerage firm that ousted its chief executive after posting record losses, has hired Nelson Chai from NYSE Euronext to replace Jeff Edwards as chief financial officer.
Chai, 42, takes over on December 10. He had been CFO of the NYSE under former chief executive officer John Thain, who started yesterday as Merrill's CEO.
Edwards, 46, was promoted into the job in 2005 by then-CEO Stan O'Neal, who was ousted by Merrill Lynch's board on October 30 after the collapse of the subprime mortgage market led to a US$2.24 billion ($3 billion) third-quarter loss, six times what the firm had forecast just three weeks earlier.
Thain's quick work bringing in an outsider to oversee the firm's finances may reassure investors, according to CreditSights analyst David Hendler.
"Edwards was closely associated with O'Neal, and at different points in time they gave a sense of comfort regarding subprime mortgages, and it didn't turn out to be right," Hendler said.
He said the firm needed "a fresh pair of eyes on internal workings and more credibility with the analyst community".
Merrill shares have declined almost 37 per cent this year, the second-worst performance after Bear Stearns among the five largest US securities firms.
"Nelson was a key adviser to me and the board of directors at NYSE," Thain, 52, said. He was "instrumental in the development of and execution of our international expansion and overall growth strategy".
Chai was CFO at Archipelago Holdings when NYSE bought the Chicago all-electronic exchange in March 2006. He joined the NYSE as CFO and held the job through Thain's purchase of Paris-based European exchange owner Euronext NV in April.
"At the end of day, I'm someone that John has trust in and knows that I will be loyal," Chai said. "Any counsel or advice I give, he doesn't have to question what the motive is".
- Bloomberg
