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Merrill Lynch was one of the few remaining investment banks before it agreed to be acquired by Bank of America in September. Merrill Lynch received $10 billion from the Treasury Department’s Capital Purchase Program (CPP) while its new parent, Bank of America, obtained $15 billion from the same program.

Merrill Lynch was first formed as Charles E. Merrill and Co. in 1914, but quickly became Merrill Lynch in 1915 with the addition of Edmund C. Lynch.  Merrill Lynch grew throughout the 20^th century with a variety of mergers and acquisitions. Charles Merrill died in 1956 at the age of 70, and in 1998 was named by CBS and Time as one of the “People of the Century: 20 Who Changed Our Lives.”

The firm’s logo is a bull and its long-time motto is that they are “Bullish on America.” The company is rated 40 on the Fortune 500 and the “Thundering Herd” (the nickname for the employees) are in 40 foreign markets across the globe.

While Merrill Lynch was a relative late-comer to the world of exotic mortgage backed securities, the company made up for lost time in the mid-2000s, including the 2006 $1.6 billion acquisition of First Franklin, a lender heavily into risky mortgages. By 2007, Merrill Lynch was the leader in synthetic CDOs (collateralized debt obligations and credit default swaps) that were backed by mortgages and hedges against defaults, these are high risk, high return investments.

When the property market tanked, Merrill Lynch President and CEO Stanley O’Neal was forced out and John Thain, former head of the New York Stock Exchange, was brought on board. As the depth of economic crisis became more dire, Merrill Lynch tried to offload their bad paper, selling some for as little as 22 cents on the dollar. In September 2008, LehmaBrothersn , another storied investment bank, collapsed under its debt. Thain quickly saw the writing on the wall and within 24 hours, Merrill Lynch was sold to Bank of America for $50 billion.

Federal contracts

USAspending.gov (last accessed 11/25/08)

Lobbying reports (if any)

Political Contributions

Center for Responsive Politics (Last Accessed 11/25/08).

Related Articles

November 18, 2008 Bank of America’s Lewis Says Merrill Deal `On Track’ (Bloomberg)

November 11, 2008 Everybody Hates Merrill Lynch This Week (US News & World Report Ticker blog)

November 6, 2008 Merrill’s Thain May Receive $5.2 Million in Takeover (Bloomberg)

October 30, 2008 Wall Street Won’t Surrender on Bonuses, Veterans Say (Bloomberg)

October 4, 2008 Merrill Lynch’s chief to stay at Bank of America after merger (International Herald Tribune)

September 15, 2008 Weekend Merger Struck With Bank of America (Washington Post)

Information obtained from Taxpayers for Common Sense.

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Tags: 2008 emergency economic stability act, bailout, bank of america, capital purchase program, economic crisis, merril lynch, tarp