Merrill Lynch

Topics: Merrill Lynch, Bank of America, Subprime mortgage crisis Pages: 23 (8469 words) Published: December 12, 2012
Merrill Lynch
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This article is about Merrill Lynch as an independent company prior to its January 2009 acquisition by Bank of America and its continuing existence as the wealth management division of Bank of America. For the corporate and investment banking division of Bank of America, see Bank of America Merrill Lynch Merrill Lynch

Subsidiary of
Bank of America

IndustryFinance and Insurance

Founded1914 (as Charles E. Merrill & Co.)[1]

Founder(s)Charles E. Merrill
Edmund C. Lynch

HeadquartersFour World Financial Center
250 Vesey Street
New York, New York United States

Area servedWorldwide
ProductsFinancial Services
Investment management

Employees60,000 (2008)
15,100 (Financial Advisors 2010)
Bank of America

Merrill Lynch[2] is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets, it is the world's largest brokerage.[3] Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York Stock Exchange under the ticker symbol MER. Merrill agreed to a purchase by Bank of America on September 14, 2008, at the height of the 2008 Financial Crisis.[4] It ceased to exist as a separate entity in January 2009.[5] Merrill Lynch is headquartered in New York City, and occupies the entire 34 stories of the Four World Financial Center building in Manhattan. •

Founding and early history
The company was founded on January 6, 1914, when Charles E. Merrill opened his Charles E. Merrill & Co. for business at 7 Wall Street in New York City. A few months later, Merrill's friend, Edmund C. Lynch, joined him, and in 1915 the name was officially changed to Merrill, Lynch & Co. At that time, the firm's name included a comma between Merrill and Lynch.[6] In 1916, Winthrop H. Smith joined the firm.

Merrill Lynch logo c. 1917
In its early history, Merrill, Lynch & Co. made several successful investments. In 1921, the company purchased Pathé Exchange, which later became RKO Pictures. In 1926, the firm made its most significant financial investment at the time, purchasing a controlling interest in Safeway, transforming the small grocery store into the country's third largest grocery store chain by the early 1930s. In 1930, Charles Merrill led the firm through a major restructuring, spinning-off the company's retail brokerage business to E.A. Pierce & Co. to focus on investment banking.[7][8] Along with the business, Merrill also transferred the bulk of its employees, including Edmund C. Lynch and Winthrop H. Smith. Charles Merrill received a minority interest in E.A. Pierce in the transaction. Throughout the 1930s, E.A. Pierce remained the largest brokerage in the U.S. The firm, led by Edward A. Pierce, Edmund Lynch and Winthrop Smith would also prove one of the most innovative in the industry, introducing IBM machines into the business' record keeping. Additionally, by 1938, E.A. Pierce would control the largest wire network with a private network of over 23,000 miles of telegraph wires. These wires were typically used for trade execution.[9]

E.A. Pierce & Co. (above) merged with Merrill Lynch in 1940. The following year Fenner & Beane (below) was acquired by the firm Despite its strong position in the market, E.A. Pierce was struggling financially in the 1930s and was thinly capitalized.[10] Following the death of Edmund C. Lynch in 1938, Winthrop Smith began discussions with Charles E. Merrill, who owned a minority interest in E.A. Pierce about a possible merger of the two firms. On April 1, 1940, Merrill Lynch, merged with Edward A. Pierce's E. A. Pierce & Co. and Cassatt & Co., a Philadelphia-based brokerage firm in which both Merrill Lynch and E.A. Pierce held an interest.[10] and was briefly known as Merrill Lynch, E. A. Pierce, and Cassatt.[11] The company became the first...
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