The $50bn Insult: 'But Stan, Ken Lewis Is An A..hole'

William Cohan, the highly-regarded author of recent best sellers about Lehman Brothers and Lazard, has been given access to former Merrill Lynch CEO Stan O'Neal. For the first time, O'Neal has come out and told his side of the story. The results, published by Fortune magazine, are explosive.

O'Neal blames his board for not allowing him to sell the firm in 2007, as he knew that this was the only way it would ultimately survive due to toxic assets that were already infecting its balance sheet. And the former Merrill CEO points the finger specifically at main board director Alberto Cribiore, who was dead set against a sale. According to Cohan, O'Neal claimed: 'Alberto was the most knowledgeable person on the board by far about investment banking and about all the issues that we were talking about. If Alberto didn't buy the argument, there was no way I was going to be able to sell the argument to anyone else'.

First in 2007, O'Neal held informal talks with Bank of America CEO Ken Lewis, with talk focusing on a possible purchase at $90 / $100-a-share. But Cribiore allegedly wasn't having any of it. 'But Stan, Ken Lewis is an asshole', O'Neal claims Cribiore said, hoping to solve Merrill's problems without selling the company. '(Merrill's) a great brand, is a great franchise', O'Neal remembers Cribiore articulating, 'Let's fix the problem rather than sell the company. Let's save the franchise'.

Later that year, O'Neal then tried to do a deal with Wachovia (which probably wouldn't have done either firm much good as it turned out), but he was again rebuffed by Cribiore, who's initial reaction was said to be: 'But we don't want to move to Charlotte'. Soon after, as Merrill's position worsened, O'Neal was fired.

But Merrill Lynch's problems couldn't be fixed, and the firm eventually fell into the arms of Bank of America, in September 2008, in a cut price deal that cost stockholders around $50bn in potential gains. O'Neal said that, after the deal was announced, he sent Cribiore one final e-mail: 'My former friend, you should have helped me sell this business when we had the chance'.

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