Mike Meyer, who was fired from Merrill Lynch in 1998 after being held responsible for $10-20 million in losses, and who joined Banc of America Securities last week as head of U.S. corporate bond trading, also reportedly caused up to $75 million in losses at UBS Warburg, the firm he left to join B of A.
In 1998 Meyer was fired from Merrill Lynch for unauthorized trading in Treasury bond futures, which caused losses of $10-20 million, according to several news reports of the incident. According to a copy of Meyer's "U-4" disciplinary record on file with the National Association of Securities Dealers and obtained by BondWeek, Meyer "expressed surprise that my position showed that I was 'short' approximately 20,000 contracts. They indicated that I had exceeded Merrill's trading limits, an assertion that I did not dispute. Management told me that I was discharged for violating Merrill's trading policies and for not telling management." Meyer was travelling and could not be reached for immediate comment, according to Jim Kelligrew, head of global high-grade sales, trading and research at B of A, who referred further questions to Tara Burke, a B of A spokeswoman. Burke disputes the losses at UBSW.
Calls to Robert Wolf, UBSW's co-head of global fixed-income, were referred to David Walker, a firm spokesman. Walker confirmed Meyer's resignation, but declined to comment on any possible losses, citing firm policy.
Meyer has a reputation on the street as a talented, aggressive trader, and when the suffering energy sector took its recent nosedive, talk of huge losses in the sector swirled around him.
One head of a trading desk says he is not surprised that B of A hired Meyer, but only that he was made head of the desk. "I'd never hesitate to hire somebody who has qualifications and knowledge about the markets and has trading experience. As for the situation at Merrill, was he doing unauthorized trading or was that their excuse--I'd have to know more about the situation. As for his being too aggressive, that's his risk manager's problem. Now if you make him the risk manager--I don't know what the thinking is there."
The desk head cites the case of Howie Rubin, a former mortgage-backed trader at Merrill Lynch who reportedly lost $300 million. "Howie went to Bear [Stearns] and had a manager and did okay, from what I understand."