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CtW Investment seeks accountability from Merrill Lynch directors for shareholders' mortgage-related risk
By Lisa Kerner
Charlotte, N.C., Jan. 16 - CtW Investment Group wants four Merrill Lynch & Co., Inc. directors to explain what they did to protect shareholders from excessive mortgage-related risk over the past two years, according to a statement released on Wednesday.
The four directors, all members of the finance committee, are Alberto Cribiore, John D. Finnegan, Ann N. Reese and Charles O. Rossotti. None of the finance committee members are up for election this year due to Merrill Lynch's classified board.
"Merrill Lynch's appalling failure to manage risk destroyed 43% of the firm's value in one year and contributed to a broader crisis of confidence now afflicting the financial markets," CtW executive director William Patterson said in a news release.
"Former CEO Stanley O'Neal's unceremonious departure does not absolve the board from ultimate responsibility."
This proxy season, CtW said, shareholders will be demanding accountability, beginning with individual directors.
CtW said it will encourage shareholders to withhold votes from Armando Codina, chair of the nominating committee that appointed finance committee members and "insulated them from accountability to shareholders by maintaining a staggered board."
Patterson added that Merrill's board failed to prevent the company from "excessive risk as it plunged headlong into complex mortgage-related debt."
Merrill also failed to monitor O'Neal, who implemented the risky strategies and created the chief risk officer position too late, according to the release.
CtW has already sought similar accountability from five Citigroup Inc. directors.
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