Lehman Slips, Merrill Probed, Morgan Stanley Fined

The Wall Street Journal points out that, despite gearing up like it means it in Europe, Lehman Brothers is actually going a little backwards in the European M&A rankings.

The newspaper points out that, despite a heavy investment in recruiting top talent into the region and restructuring the unit this year, Lehman has slipped to 13th place in Dealogic's M&A league table by rank deal value for the year to the end of September. The US firm was 10th in 2005, and is currently behind the usual suspects, and the likes of BNP Paribas, HSBC and Rothschild.

And Merrill Lynch is having a bit of a bad news week. The US Justice Department is said to have sent the firm a request for information as a part of its informal probe into anti-competitive behaviour in the private equity space. And 16 current and former black brokers are seeking to join a class-action lawsuit against the firm, which claims that Merrill discriminates against black employees in its US brokerage unit. The New York Daily News reports that, according to the original complaint, 70% of Merrill's black brokers with more than 10 years services are in the bottom two-thirds of the firm's rankings.

Finally, Reuters reports that Morgan Stanley was fined $500,000 by The New York Stock Exchange Wednesday, and censured 'for failing to report short interest positions in hundreds of securities for as long as 20 years'.

And Matthew Lynn, writing for Bloomberg, wonders whether the Wall Street firm has entered the hedge fund fray at the wrong time. Last week Morgan Stanley spent around $1bn buying one hedge fund and taking interests in two others. Although the deals may be good ones, CEO John Mack might find he has bought at the top of the hedge fund market. And, as Lynn points out, if Mack was really serious about hedge funds, why didn't he go after Man Group, the world's largest publicly-traded hedge fund which has a market cap of around $18bn ? Now that would have shown that he really meant business.

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