Shares in Merrill Lynch were down nine per cent by FT Alphaville home time - struck down by the Journal’s suggestion that the bank might have effectively warehoused mortgage-related losses with hedge funds, piling up potential losses for the future. Here is Merrill’s formal response, in full:
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.
