Merrill Lynch Investment Managers, the Merill Lynch asset management and mutual fund unit with $533 billion in assets under management, has fired two top executives for failing to adequately supervise a currency trader who misallocated currency trade returns, a spokeswoman for the company said.
Tim Manna, global head of fixed income for MLIM, and David Jacob, head of fixed income for Europe, the Middle East, and Africa, did not act quickly enough after learning about the impropriety.
Earlier this year, MLIM "discovered internally" that the trader was misallocating returns favoring some clients and hurting others, the spokeswoman said. The clients affected were primarily institutional clients, including some retail mutual funds.
The company launched an investigation in late March and reviewed over 200,000 trades. The company fired the trader, whose name the company is not releasing, at the end of April.
The company is compensating the clients that were hurt by the misallocations. "From our perspective, the situation is resolved," the spokeswoman said.
It is not clear what if anything will happen from a regulatory standpoint. Regulatory authorities were contacted six weeks into the investigation and made aware of developments along the way, the spokeswoman said. "I really dont know if theyll pursue anything further," she said."