Shares of MER are down almost 9 percent and while there are a cornucopia of things to choose from in deciding what’s to blame for the plunge (an imminent $10 billion writeoff, the fact that nobody wants to be CEO of the place, the birth of Tim Sykes, etc), Merrill itself has decided to pin it on the Wall Street Journal’s allegation that the firm has modeled its accounting practices on those of the dearly departed Enron Corporation. And how are they dealing with the problem? By issuing a totally unconvincing statement, that’s how. Nobody puts Merrill in a corner it didn't already back itself into by being (maybe, maybe) con artists:
This morning, an article in the Wall Street Journal about Merrill Lynch & Co., Inc., relying on unidentified sources, speculated about inappropriate transactions that “may have been designed” to avoid write-downs that “might have been” required earlier in the year. The story is non-specific and relies on unidentified sources. We have no reason to believe that any such inappropriate transactions occurred. Such transactions would clearly violate Merrill Lynch policy.
On a related note, who's going to go for the hatrick on Monday and deny something salacious (but probably true) about them that the Journal's going to print? SAC would be the easy one, but what else can J dig up that we don't already know? That would be a story worth reading.