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Merrill demotes risk manager
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October 16, 1998: 8:31 a.m. ET
Brokerage replaces executive in charge of risk taking after posting loss
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NEW YORK (CNNfn) - Merrill Lynch apparently is replacing its top financial risk manager, the same week that the nation's largest brokerage house announced major job cuts and posted heavy losses in the latest quarter.
The Wall Street Journal reports that Merrill demoted Daniel T. Napoli, 49, as head of risk management and placed him on leave of absence while he awaits appointment to another management position.
Napoli helped develop the way the firm hedges and controls its risk.
Richard A. Dunn, 35, co-head of the firm's international equity markets group, will replace Napoli, according to the Journal.
On Tuesday, Merrill said it will cut 3,400 employees and 900 freelance workers in efforts to pare costs amid global market volatility.
The firm reported a third-quarter loss of $164 million, or 42 cents a share, the first loss Merrill has posted since the fourth quarter of 1989, when it went into the red after taking a restructuring charge.
The company said it took a $288 million charge in the third quarter to cover the costs of severance packages.
Earlier this month, Merrill disclosed it had a net exposure to all hedge funds totaling $84 million. It also announced last month that trading losses in emerging markets would slice an estimated $135 million from its profits.
Shares of Merrill Lynch (MER) closed up 4-9/16 Thursday at 48-1/16 on the New York Stock Exchange. 
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Merrill Lynch
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