NEW YORK — Merrill Lynch co-president Ahmass Fakahany is stepping down, two weeks after the third-biggest U.S. securities firm posted a record loss on subprime mortgages and bonds acquired while he oversaw risk management.
Fakahany, 49, will retire Feb. 1, Merrill said Monday in a statement. Co-president Greg Fleming, who served alongside Fakahany as a deputy to former chief executive Stan O’Neal, plans to remain under new CEO John Thain, according to a person familiar with the situation.
A nose dive in the value of subprime mortgages saddled New York-based Merrill with a $9.8 billion fourth-quarter loss, the worst in its 94-year history, and led the firm to obtain cash infusions from investment funds controlled by the governments of Singapore, Korea and Kuwait.
O’Neal was ousted in October following a $2.24 billion third-quarter loss, and Thain is rebuilding the firm’s executive ranks.
Fakahany is at least the third member of O’Neal’s executive team to depart since Thain, 52, took over Dec. 1. Communications head Jason Wright was replaced in December, and Americas brokerage head McIntyre “Mac” Gardner stepped down earlier this month.
Fakahany indicated late last year that he planned to “transition out of Merrill and pursue other interests,” Thain said in the statement. “He provided leadership during this challenging period.”
A 21-year Merrill veteran and former chief financial officer, Fakahany was promoted to co-president by O’Neal last May.
During his tenure, Merrill became the biggest underwriter of collateralized debt obligations, or CDOs, which include securities packaged from bonds linked to subprime mortgages.
Merrill held $8.8 billion of subprime mortgages and $32.1 billion of CDOs by last June. The fourth-quarter loss included $16.7 billion of write-downs on loans, CDOs and other assets infected by mortgages to borrowers with poor credit histories or heavy debts.
Changes at the top
Executive comings and goings in the past week:
IN
Raafat E.F. Fahi: Chief executive and president, Nabi Bio pharmaceuticals
Naveen Hussain: Vice president of engineering and technology in India, Boeing, as the company vies for $11 billion in fighter-jet contracts from the country
Michael Norona: Chief financial officer, Advance Auto Parts, replacing Michael Moore
Thomas Reinckens: President, women’s- apparel retailer Cache, becomes chief executive
OUT
Phil Bronstein: Editor, San Francisco Chronicle, to become editor-at-large for the Chronicle and Hearst’s newspaper division
Ahmass Fakahany: Co-president, Merrill Lynch, two weeks after a record loss on subprime mortgages
Aylwin Lewis: Chief executive, Sears Holdings Corp.
James O’Shea: Editor, Los Angeles Times, after he rejected a management order to cut the newsroom budget
Jeffrey Pfeifle: President, clothing retailer J. Crew
Steve Pogorzelski: Executive vice president for global sales, online job-listings provider Monster
Paul Saleh: Chief financial officer, Sprint Nextel
Meg Whitman: Chief executive, eBay
Wynn Willard: President of the international division, store-brand soft-drink maker Cott
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