Look, if former Merrill Lynch CEO Stan O’Neal had known that the bank he ran was liable for $45 billion in crappy collateralized debt obligations, he would have done something about it, he tells William Cohan in Fortune this week, in his first interview since he was forced to resign in October 2007. The problem was that he didn’t know. Why? Because the CDOs were hiding.
The magnitude of the problem “hadn’t been apparent in ways it should have,” he told the magazine.
That is to say, they were on the books, but it wasn’t until August of 2007, when he was vacationing at his home in Martha’s Vineyard, that O’Neal decided that given everything that was going on, he might want to actually crack said books open and take a look at what was going on. And when he did, “a few things became clear,” he said. Namely, that neither he nor anyone else at the firm had had any idea what they were doing.
Do you get that? First of all, it wasn’t really Stan O’Neal’s fault that he had allowed his firm to accrue an ungodly amount of toxic securities through sheer negligence. The problem was the problem. Not that Stan O’Neal didn’t feel bad about it. He did feel bad. Ball-crushingly bad.
Not that he didn’t stand up and fight! He did! He tried to sell the firm to Bank of America, but this other guy was like, “No, Ken Lewis is an asshole.” So he was just like, “Fine, I’ll take my $160 million exit package and go. And then he did.