Merrill To Do More Prop Trading, Man Group Accused

Speaking at a financial services conference earlier this week, Merrill Lynch boss Stan O'Neal said that his firm would push the boat out a bit more and trade more of its own capital.

Traditionally more cautious on the trading front than some of its main rivals, Merrill will now invest defined additional amounts of its own capital in order to generate increased revenues. O'Neal stressed, however, that his firm would apply tight risk management controls.

Merrill's boss also said that his firm plans to boost its prime brokerage business, and will be investing in investment banking and trading activities in China. O'Neal said that he continues to look at smaller acquisition targets, and would be open to any joint-venture deals which made sense for the business. He once again, however, ruled out a transformational merger deal in the near future.

Finally, according to the Guardian, hedge fund Man Group has been accused of using 'disingenuous' and 'specious' legal arguments to prevent discovery of allegedly damaging information about its alleged role in a US hedge fund scandal. Clark Hodgson, the court-appointed receiver to Philadelphia Alternative Asset Management (PAAM), claims that $179m of PAMM funds was hidden in a secret account at Man Financial. Man denies the allegation.

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