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Merrill Co-Prez To Leave Before He Gets Kicked Out


Ahmass Fakahany, the Merrill Lynch co-president who, if you want to go there, might not have done the greatest job overseeing risk management at the firm over the last several months, is expected to resign shortly, following the ousting of his main man Stan. He probably won’t be getting a package even close to the one O’Neal’s leaving with, but as a reward for exiting stage left without much of a fight, will be tossed a few extra shares of MER, because, as one member of the board put it, “They’re basically worthless anyway, if you ask me. You want me to be honest? I’d swap all my Merrill stock for a few stacks of unmarked Mozilo Bucks if I had shady enough contacts to find them, and that grin didn’t scare the shit out of me.”
On a related note, Chief Financial Officer Jeffrey Edwards apparently offered to quit at some point last week, but was told "No, no, your punishment for the $8.4 billion is that you have to stay."
Merrill co-president Fakahany seen leaving [Reuters]
Merrill Lynch CFO Edwards offered to quit [Reuters]


Paulson and Co Investor Finds New And Interesting Way To Kick John Paulson When He's Down

As Paulson and Co employees, clients, and people named John Paulson do not need to be told, the past year and half has not been the most joyous of times for the hedge fund giant. After making billions shorting subprime mortgages, the firm ended 2011 down 55 percent, was down 16 percent through the first half of 2012, and as of July, saw assets under management decline 44.9 percent to $21 billion from $38.1 billion, due to a combination of unfortunate performance and redemptions by investors so angry at the fund that they've felt the need to repeatedly tell anyone who will listen that parting ways with P&C was among the best if not the best decision they've ever made. One investor that hasn't had to consider voicing its unhappiness to the press or even worry about losing money at all? The 92nd Street Y. Last November Paulson guaranteed that he would personally cover their losses, whatever they turned out to be, come year-end. And the generosity did not stop there: for this one investor only, Paulson offered his services pro-bono, waiving all fees. So while he probably didn't expect representatives of the Y to rent a skywriting plane to proclaim their love and appreciation for him over midtown, lobby the city of New York to get 92nd renamed Paulson Street, or have his face tattooed to their chests, he probably also figured they wouldn't turn around and hit him the mother of all slaps in the face. In this case the declaration that despite the highly favorable terms of their arrangement, any involvement with P&C still felt a tad too risky for everyone's comfort level. In the midst of the financial crisis, the 92nd Street Y came up with a sweetheart deal for its endowment: investments in funds run by the likes of John Paulson, Marc Lasry, and other hedge-fund luminaries that were fee-free and guaranteed against losses. The strategy performed well for several years, said people familiar with how it worked, as the Y benefited from risk-free investing in some of the fund industry’s most successful strategies. But, concerned about the impact of a catastrophe in which a money manager couldn’t repay losses and eager to construct a more diversified portfolio, the Y recently opted to redeem its hedge-fund investments, these people said, and rebuild its financial strategy from scratch. Paulson himself is worth $15 billion, so a catastrophe in which he couldn't repay the Y's losses would have to be a big one. And don't give him some line about how you're pulling out of all hedge fund investments and it's not personal. You could have let him have this. Despite Sweet Deal, 92nd Street Y Redeems Paulson Money [CNBC] Earlier: John Paulson: I’ll Get The Losses This Year, Next Year We Go Dutch?