• Will Aaron Charney ever have to work again? More than likely — he may not have gotten more than $100,000 in his sexual-harassment settlement with Sullivan & Cromwell. [PrawfsBlawg via Above the Law]
• Should law schools be more like business schools? One law prof thinks so, and he looks a little like Justin Timberlake, so he must be right. [Law Blog/WSJ]
• Do Cravath's two rounds of bonuses signal Big Law strength and more money for associates, or is the firm just hedging so they aren't locked in to paying the same amount next year? [NYT]
This morning we learned that Merrill's Lynch's soon-to-be-deposed CEO Stan O'Neal had a serious stick up his butt when it came to Goldman Sachs, and that whenever Goldman reported profits O'Neal would "grill his executives" "to the point where you didn't want to be in the office," on Goldman earnings days, one former Merrill executive told the Wall Street Journal. Now on DealBook, Andrew Sorkin has done a thoughtful analysis of why Goldman has soared of late while Merrill has tanked, and includes a telling little nugget of info.
The new high illustrates how Goldman and Merrill — whose chief executives own apartments in the same Park Avenue co-op in New York — have been on opposite trajectories of late. Shares of Goldman are up—
Wait a second. Hold up. Stan O'Neal and Goldman CEO Lloyd Blankfein live in the same building? Google: Yes! 941 Park Avenue, the plush-but-not-too-plush building at 81st Street that was also home to Tom Brokaw and Claude Arpels. No wonder the dude was all salty about Goldman. Blankfein is clearly the Newman to O'Neal's Jerry! Look at him smiling like that! Oh, the humanity.
As Merrill Reels, Goldman Glitters [DealBook/NYT]
READ MORE »
What did you do this weekend? Oh, yeah? Well, Merrill Lynch CEO Stan O'Neal, whom we put on Deathwatch last week, spent the weekend negotiating his $160 million severance package. Nice payout, considering he, you know, was responsible for the biggest loss in the bank's history. But can we just say it's kind of amazing how fast this all happened? It was only a week ago that O'Neal announced his multi-billion-dollar write-off, and this morning, the Wall Street Journal reports he's expected to resign this afternoon. Whereas we and the rest of the universe have had Citigroup's Chuck Prince Deathwatch for like three years and still the dude is cozy in his Lexington Avenue throne. So, why has O'Neal gone down like a ton of bricks, while Prince is living large? Management Today suggests it might be because O'Neal is black. But we're not so sure. (Also, not so comfortable with that headline, guys, considering O'Neal is actually a descendent of slaves.) But more likely it is just that he:
• Reported an $8 billion loss in the third quarter, which makes Chuck seem like he was being frugal for losing only $6 billion.
•Was super-competitive with Goldman Sachs, to the point where his staff avoided him during Goldman earnings because he was not nice.
• LOST $8 BILLION
• Was maybe talking to Wachovia about a merger behind the back of his board.
• Lost $8-fucking-billion
We think that about sums it up.
O'Neal Out As Merrill Reels From Loss [WSJ]
O'Neal Gets Merrill Lynched [Management Today]
Earlier: The Stan O'Neal DeathwatchREAD MORE »
Merrill Lynch CEO Stan O'Neal has enjoyed a spectacular rise to the top of Merrill Lynch. He makes $48 million a year! Alas, now he's sinking like a stone. Since it is Schadenfreude Friday, let's review how it all went down.
October 5: Merrill estimates it will take a loss of $4.5 billion on collateralized debt obligations, i.e., mortgage-backed securities.
Tuesday, October 23: Er, take that back. CEO announces that third-quarter losses might be more than first projected. Like $2 billion more. Whoopsie! O'Neal's "job could be in jeopardy depending on the actions he takes to reassure Merrill's board," predicts the Wall Street Journal.
READ MORE »
• Matt Drudge cracked open The New Republic's Iraq fabulist controversy once again. Did the mag's Baghdad diarist really make up details about mass graves and troops ridiculing a disfigured female soldier? Franklin Foer complains that Drudge's docs could only have come from the Army. [Slate, NYO]
• Chris Jones, the managing editor of Portfolio.com, announced his departure from the mag after giving notice over a month ago. High-level rumors also indicate Joanne Lipman may soon be relieved from command — but only for the Website. [WWD]
• The Judith Miller movie is now filming in Memphis, and let's just say that Kate Beckinsale is way too hot to be a reporter. On the other hand, the Valerie Plame CIA character, played by Vera Farmiga, looks just about right. [WP]
Embattled CEOs like Citigroup's Chuck Prince, whose departure has been rumored and longed for since he announced profits were down by 60 percent last month, and Merrill Lynch's Stan O'Neal, who the other day announced they'd be taking $8.4 billion — that bears repeating: $8.4 billion — in write-downs, ought to take a cue from Bank of America's Kenneth Lewis, who after reporting a 32 percent drop in third-quarter results decided to do like a smart despot and start executing his cronies before the people start marching him to the gallows. Last night, Lewis announced a restructuring of the bank, which includes the "early retirement" of B of A head of investment banking R. Eugene Taylor, above, a trader for some 38 years and a longtime tennis buddy of the CEO's. He'll be replaced by Brian Moynihan, a bright young thing who will move from Boston to New York to take over the division. But Moynihan has never run a capital markets unit before now, and honestly, with the Red Sox in the World Series, how popular will he be in New York?
BofA's Wall Street Retreat [WSJ]
Related:The Hanger-on [NYM]
READ MORE »
• Marcus Brauchli remains top editor at the Journal, but there's a growing sense of inevitability that Robert Thomson, Sunday Times of London editor and Murdoch "old boy," will challenge him for the position. (Related question: Does Murdoch have any "boys" who are not "old"?) [NYO]
• The Times' third-quarter earnings almost doubled analysts' expectations, giving the paper a chance to gloat about the big hit Morgan Stanley took a week ago by selling its stake in the company. [NYT, DealBook/NYT]
• Rick Reilly, previously the highest-paid writer in the history of Time Inc., will get $2 million a year for five years at ESPN. Who knew wussifying sports would pay so well? [NYP]
• James Colliton, the former Cravath associate embroiled in a sex-crimes suit, got a lighter sentence after he admitted to paying a mother for sex with her two teenage girls. [Law Blog/WSJ]
• Debevoise and Plimpton's marquee new hire, the former attorney general of the U.K., has a few scuffs on his highly polished shoes: He carried on an affair while in office with a leading woman barrister. [Above the Law]
• When $1,000 an hour isn't enough, premium billing — a kind of law-firm tip for a job well done — is the best way to really start raking in the profits. [DealBook/NYT]