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Merrill said to fire execs
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September 10, 2001: 7:34 a.m. ET
Report says trader misallocated trades to help some clients at expense of others
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NEW YORK (CNNfn) - Merrill Lynch & Co. fired two senior executives for not supervising a currency trader who allegedly misallocated trades to help some clients at the expense of others, according to a published report Monday.
The Wall Street Journal reported that the two executives were with Merrill Lynch Investment Managers, the fund-management unit of the brokerage firm. It said the trader responsible for the irregularities, who was not identified by the paper, left the firm in April.
The paper, quoting an unnamed source familiar with situation, said the trader's activities were brought to the attention of Merrill executives more than a year ago, but that management failed to act. The paper quoted a Merrill spokeswoman as saying the firm "acted swiftly after the situation came to the attention of top management."
The executives dismissed last week were Tim Manna, the global head of fixed income investments for Merrill's fund-management unit, and David Jacob, the unit's head of fixed income for Europe, the Middle East and Africa. A third executive, Bob Browne, co-head of the unit's U.S. fixed-income business, was let go as part of an ensuing management shake-up, according to the paper.
The Journal said all three were lured to Merrill from J.P. Morgan Investment Management several years ago in what was then considered a coup by Merrill. The paper said none of the three could be reached for comment.
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The trader allegedly would use differing settlement dates for trades in different stock markets to benefit favored clients. The paper said it does not appear the trader benefited himself from the irregularities, and that he was apparently misallocating the gains to impress certain clients. It said the firm is prepared to compensate clients who were hurt by the trader's actions, but it will not try to recoup the improper gains that some clients received because it does not believe they acted in concert with the trader. 
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