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Total Categories: 6
The firm, initially established as Charles E. Merrill & Co., was founded by Charles E. Merrill in 1915.
Answer: False
The historical record indicates that the firm's inception occurred in 1914, not 1915 as stated.
The inaugural office of Charles E. Merrill & Co. was situated on Wall Street in New York City.
Answer: True
Upon its establishment, the firm's initial operational base was located at 7 Wall Street in New York City.
In 1930, Charles E. Merrill divested the company's retail brokerage operations to concentrate exclusively on investment banking.
Answer: False
The strategic restructuring in 1930 involved spinning off the retail brokerage business to E. A. Pierce & Co., thereby enabling Merrill Lynch to focus its efforts on investment banking.
Identify the principal founder of the entity that evolved into Merrill Lynch, and specify the year of its establishment.
Answer: Charles E. Merrill, 1914
The firm was founded by Charles E. Merrill on January 6, 1914. His associate, Edmund C. Lynch, joined shortly thereafter, leading to the firm's official naming as Merrill, Lynch & Co. in 1915.
What strategic redirection did Charles E. Merrill implement in 1930 to refocus the company's operational priorities?
Answer: Spun off the retail brokerage business to focus on investment banking.
In 1930, Charles E. Merrill orchestrated a significant restructuring by divesting the company's retail brokerage operations to E. A. Pierce & Co., thereby enabling Merrill Lynch to concentrate its resources and efforts on investment banking activities.
E. A. Pierce, a firm that subsequently merged with Merrill Lynch, was recognized for its pioneering adoption of advanced computing technology for record-keeping.
Answer: True
The firm E. A. Pierce distinguished itself through its innovative integration of IBM machinery for its record-keeping systems.
Merrill Lynch attained the status of the largest securities firm in the United States following its merger with Fenner & Beane in 1941.
Answer: True
Through a series of strategic mergers, including the significant integration with Fenner & Beane in 1941, Merrill Lynch established itself as the preeminent securities firm in the nation.
Merrill Lynch & Co. transitioned to a corporate structure in 1952, thereby moving away from its prior partnership status.
Answer: True
In 1952, Merrill Lynch & Co. formally incorporated, adopting a holding company structure and concluding its long-standing status as a partnership.
The acquisition of C. J. Devine & Co. in 1964 was primarily intended to broaden Merrill Lynch's retail branch network.
Answer: False
The strategic acquisition of C. J. Devine & Co., a prominent dealer in U.S. Government Securities, was pivotal in establishing Merrill Lynch's significant presence within the government securities market.
Merrill Lynch became a publicly traded entity in 1970, one year subsequent to the New York Stock Exchange permitting member firms to adopt public ownership.
Answer: False
Merrill Lynch completed its initial public offering and became a public company in June 1971, following the NYSE's policy change allowing member firms to go public the preceding year.
How did Merrill Lynch ascend to its position as the largest securities firm in the United States during the 1940s?
Answer: Through a series of mergers, including with E. A. Pierce & Co. and Fenner & Beane.
Merrill Lynch achieved its leading position through strategic mergers, notably with E. A. Pierce & Co. and Cassatt & Co. in 1940, followed by the significant integration with Fenner & Beane in 1941, which collectively established it as the largest securities firm of that era.
Following the 1964 acquisition of C. J. Devine & Co., Merrill Lynch established a formidable presence in which significant market sector?
Answer: The U.S. Government Securities market.
The acquisition of C. J. Devine & Co., a leading entity in the U.S. Government Securities sector, was instrumental in solidifying Merrill Lynch's position and influence within this critical financial market.
Which acquisition in 1978 substantially enhanced Merrill Lynch's capabilities in the securities underwriting domain?
Answer: White Weld & Co.
The acquisition of White Weld & Co., a highly regarded investment bank, significantly augmented Merrill Lynch's expertise and capacity in the crucial area of securities underwriting.
The Cash Management Account (CMA), introduced in 1977, integrated functionalities such as checking, money market fund access, and credit card services.
Answer: True
Launched in 1977, the Cash Management Account (CMA) by Merrill Lynch offered clients the convenience of consolidating funds into a money market account while providing integrated check-writing and credit card features.
Merrill Lynch's acquisition of Safeway Inc. in 1926 played a pivotal role in its evolution into a major grocery chain.
Answer: True
In 1926, Merrill Lynch acquired a controlling interest in Safeway Inc., then a nascent grocery enterprise. This strategic investment facilitated Safeway's transformation into one of the largest grocery chains in the United States by the early 1930s.
Which entity did Merrill Lynch acquire a controlling interest in during 1926, thereby contributing to its growth into a prominent grocery retailer?
Answer: Safeway Inc.
In 1926, Merrill Lynch secured a controlling interest in Safeway Inc. This strategic acquisition was instrumental in the company's subsequent expansion and development into a major grocery chain.
What financial innovation did Merrill Lynch introduce in 1977 that integrated checking, money market funds, and credit card functionalities?
Answer: The Cash Management Account (CMA).
The Cash Management Account (CMA), introduced by Merrill Lynch in 1977, represented a significant innovation by consolidating client funds into a money market account and offering integrated features such as check-writing and credit card services.
In 2003, Merrill Lynch acquired a controlling interest in TMS Entertainment, a Japanese animation studio.
Answer: False
While Merrill Lynch acquired a significant stake in TMS Entertainment in 2003, becoming its second-largest shareholder with 7.54%, this was explicitly stated to be for investment purposes and not to gain management control.
In 2003, Merrill Lynch acquired a significant stake in TMS Entertainment, aiming for management control.
Answer: False
Merrill Lynch acquired a 7.54% stake in TMS Entertainment in 2003, becoming the second-largest shareholder. The firm explicitly stated this investment was purely for portfolio purposes, not for management control.
Merrill Lynch's 'thundering herd' referred to its network of independent brokers.
Answer: False
The term 'thundering herd' denoted Merrill Lynch's extensive network of financial advisors, which was a key strategic asset enabling the direct placement of underwritten securities, differentiating it from firms relying on independent brokers.
What was the 'thundering herd' at Merrill Lynch?
Answer: A term for its network of financial advisors.
The 'thundering herd' was a colloquial designation for Merrill Lynch's substantial network of financial advisors, a critical component of the firm's strategy for direct client engagement with underwritten securities.
What distinction did Merrill Lynch achieve by publishing an annual fiscal report in 1941?
Answer: It was the first firm on Wall Street to publish such a report.
By issuing an annual fiscal report in 1941, Merrill Lynch set a precedent, becoming the first firm on Wall Street to adopt such a practice, thereby enhancing transparency in its financial disclosures.
In 1998, Merrill Lynch paid $400 million to settle accusations related to inappropriate investments sold to Orange County, California.
Answer: True
Merrill Lynch resolved allegations concerning the sale of unsuitable and high-risk investments to Orange County, California, by agreeing to a settlement payment of $400 million in 1998.
Merrill Lynch settled allegations concerning analyst research in 2002 for $10 million.
Answer: False
The settlement reached in 2002 regarding allegations of misleading analyst research amounted to $100 million, not $10 million.
Henry Blodget was permanently barred from the securities industry following charges related to his research analysis at Merrill Lynch.
Answer: True
Henry Blodget, a prominent analyst associated with Merrill Lynch, received a lifetime ban from the securities industry as a consequence of charges stemming from his research practices.
The Enron/Merrill Lynch Nigerian barge transaction in 1999 was officially recognized by the government as a legitimate sale.
Answer: False
The government alleged that the 1999 transaction involving Enron and Merrill Lynch concerning Nigerian power barges constituted a sham sale, designed primarily to enable Enron to improperly recognize profit.
In 2007, Merrill Lynch was subject to a lawsuit by the EEOC alleging discrimination based on an employee's gender.
Answer: False
The EEOC lawsuit filed against Merrill Lynch in 2007 pertained to allegations of discrimination based on an employee's Iranian nationality and Islamic religion, not gender.
Merrill Lynch settled a class action lawsuit concerning racism in 2013 for $160 million, addressing discrimination against black brokers.
Answer: True
In August 2013, Merrill Lynch reached a $160 million settlement to resolve a class action lawsuit that alleged racial discrimination against its black brokers and trainees.
Merrill Lynch paid $10 million in 2005 to settle allegations concerning improper market timing activities in its Chicago office.
Answer: False
The $10 million settlement in 2005 related to improper market timing activities occurred at Merrill Lynch's Fort Lee, New Jersey office, not its Chicago office.
Despite reporting substantial losses in 2008, Merrill Lynch disbursed $3.6 billion in bonuses, with partial funding derived from TARP.
Answer: True
In 2008, Merrill Lynch allocated $3.6 billion towards bonuses, notwithstanding significant reported losses, with a portion of these funds originating from the Troubled Asset Relief Program (TARP).
A Merrill Lynch trader in London was banned for mismarking positions by $100 million to conceal profits.
Answer: False
The trader in question was banned for mismarking positions by $100 million to conceal losses, not profits.
Merrill Lynch's significant losses leading to its sale were primarily attributable to its exposure to the technology sector.
Answer: False
The substantial losses incurred by Merrill Lynch, which precipitated its sale, were predominantly linked to its extensive holdings in mortgage-backed securities and collateralized debt obligations (CDOs), rather than the technology sector.
Merrill Lynch acquired First Franklin Financial Corp. in 2006 to supply mortgages for its Collateralized Debt Obligation (CDO) market.
Answer: True
In December 2006, Merrill Lynch acquired First Franklin Financial Corp., a major subprime lender, specifically to secure mortgage assets for its burgeoning Collateralized Debt Obligation (CDO) market activities.
MBIA initiated a lawsuit against Merrill Lynch in 2009, alleging misrepresentation of the quality of mortgage-based CDOs.
Answer: True
MBIA, a bond insurer, filed suit against Merrill Lynch in 2009, asserting that the firm had misrepresented the quality of mortgage-based CDOs underlying credit default swap contracts.
Rabobank's lawsuit concerning the 'Norma' CDO alleged that Merrill Lynch itself actively selected the underlying assets.
Answer: False
Rabobank's claim was that Merrill Lynch failed to disclose that a hedge fund, Magnetar Capital, had selected the assets for the 'Norma' CDO with the intent to bet against it, not that Merrill Lynch itself actively selected the assets.
Historically, Merrill Lynch was known for having a majority of its executives be Protestant.
Answer: False
Merrill Lynch held a historical reputation as the 'Catholic' firm of Wall Street, with a significant proportion of its executives being Irish Catholics.
The sale of Merrill Lynch to Bank of America was primarily driven by its strong performance in the tech sector.
Answer: False
The sale was precipitated by substantial financial losses stemming from Merrill Lynch's exposure to mortgage-backed securities and collateralized debt obligations, not by strong performance in the technology sector.
Between July 2007 and July 2008, Merrill Lynch incurred total losses amounting to approximately $19.2 billion.
Answer: True
During the twelve-month period from July 2007 to July 2008, Merrill Lynch recorded total losses aggregating to $19.2 billion.
E. Stanley O'Neal was terminated as CEO of Merrill Lynch in late 2007 after announcing significant profits.
Answer: False
E. Stanley O'Neal's tenure as CEO concluded in November 2007, following the announcement of substantial losses related to the subprime mortgage crisis, not significant profits.
John Thain succeeded E. Stanley O'Neal as CEO of Merrill Lynch in November 2007.
Answer: True
John Thain assumed the role of CEO at Merrill Lynch in November 2007, succeeding E. Stanley O'Neal.
In 1998, Merrill Lynch settled with Orange County, California, for what amount related to investment sales?
Answer: 400 million
Merrill Lynch paid $400 million in 1998 to resolve accusations concerning the sale of inappropriate and risky investments to Orange County, California.
What was the settlement amount in 2002 regarding allegations that Merrill Lynch published misleading analyst research?
Answer: 100 million
In 2002, Merrill Lynch agreed to a settlement of $100 million to resolve allegations concerning the publication of misleading analyst research.
Which prominent analyst at Merrill Lynch was barred from the securities industry for life in relation to research fraud charges?
Answer: Henry Blodget
Henry Blodget, a notable analyst at Merrill Lynch, was permanently barred from the securities industry following charges of civil securities fraud related to his research practices.
What was the core allegation in the Enron/Merrill Lynch Nigerian barge transaction case?
Answer: The transaction was a sham sale designed for Enron to improperly book profit.
The central allegation was that the 1999 transaction involving Enron and Merrill Lynch concerning Nigerian power barges was a contrived sale intended to allow Enron to improperly recognize profit.
In 2007, Merrill Lynch faced discrimination charges from the EEOC based on what grounds?
Answer: Religion and nationality (Iranian).
The EEOC lawsuit against Merrill Lynch in 2007 alleged discrimination against an employee based on his Iranian nationality and Islamic religion.
What was the total amount Merrill Lynch paid in August 2013 to settle a class action lawsuit alleging racism?
Answer: 160 million
In August 2013, Merrill Lynch settled a class action racism lawsuit for $160 million, addressing allegations of discrimination against black brokers and trainees.
Merrill Lynch paid $10 million in 2005 to settle allegations related to improper activities in which office?
Answer: Fort Lee, New Jersey
The $10 million settlement in 2005 pertained to improper market timing activities conducted by financial advisors at Merrill Lynch's Fort Lee, New Jersey office.
What controversial decision did Merrill Lynch make in 2008 regarding bonuses, despite reporting massive losses?
Answer: Paid $3.6 billion in bonuses, partly using TARP funds.
Despite reporting $27 billion in losses for 2008, Merrill Lynch proceeded to pay $3.6 billion in bonuses, with a portion of these funds sourced from the Troubled Asset Relief Program (TARP).
A Merrill Lynch trader in London received a five-year ban for what action in 2010?
Answer: Mismarking positions by $100 million to conceal losses.
A Merrill Lynch trader based in London was banned for five years after engaging in the practice of mismarking positions by $100 million, an action taken to conceal substantial trading losses.
In June 2018, the SEC charged Merrill Lynch with misleading customers about what aspect of their brokerage accounts?
Answer: Trading venues used for their orders.
The Securities and Exchange Commission (SEC) charged Merrill Lynch in June 2018 with misleading brokerage customers regarding the specific trading venues utilized for their orders between 2008 and 2013.
Merrill Lynch settled SEC charges regarding American depositary receipts (ADRs) in March 2019 for over $8 million.
Answer: True
In March 2019, Merrill Lynch agreed to pay over $8 million to resolve Securities and Exchange Commission (SEC) charges related to the improper handling of pre-released American depositary receipts (ADRs).
What was the nature of the settlement Merrill Lynch reached in March 2019 concerning American depositary receipts (ADRs)?
Answer: Settlement for over $8 million regarding improper handling of pre-released ADRs.
In March 2019, Merrill Lynch settled SEC charges concerning the improper handling of pre-released American depositary receipts (ADRs) by agreeing to pay over $8 million, encompassing disgorgement, interest, and a penalty.
The acquisition of Merrill Lynch by Bank of America occurred in the aftermath of the 2008 financial crisis.
Answer: True
The acquisition of Merrill Lynch by Bank of America in September 2008 took place during the peak of the 2008 financial crisis, specifically amidst the subprime mortgage crisis.
Bank of America acquired Merrill Lynch for approximately $38.25 billion in cash.
Answer: False
Bank of America's acquisition of Merrill Lynch was valued at approximately $38.25 billion in stock, which equated to roughly $50 billion or $29 per share at the time of the transaction, not in cash.
Merrill Lynch & Co. officially merged into Bank of America Corporation in 2018.
Answer: True
The formal integration of Merrill Lynch & Co. into Bank of America Corporation occurred in October 2018, although certain operational units continued under the Merrill Lynch name.
Bank of America's acquisition of Merrill Lynch was primarily a voluntary decision driven by strategic growth opportunities.
Answer: False
Evidence suggests the acquisition was undertaken under significant pressure from federal officials, who indicated potential repercussions for Bank of America's management if the deal did not proceed, rather than being solely a voluntary strategic initiative.
What is Merrill's current role within Bank of America?
Answer: The wealth management and investment management division.
Currently, Merrill functions as the wealth management and investment management division of Bank of America, operating in conjunction with BofA Securities, which serves as the investment banking arm.
Bank of America officially changed the division's name from "Merrill Lynch" to "Merrill" in 2019.
Answer: True
In February 2019, Bank of America formally rebranded the division, shortening its name from "Merrill Lynch" to simply "Merrill."
What division was launched by Merrill on June 21, 2010, offering electronic trading and advisory services?
Answer: Merrill Edge
Merrill Edge, introduced on June 21, 2010, is a division of Merrill designed to provide clients with electronic trading platforms and associated investment and advisory services.
Merrill Edge, launched in 2010, is a division focused on institutional trading.
Answer: False
Merrill Edge, established in 2010, is oriented towards providing electronic trading platform services and investment advisory options for individual clients, rather than focusing on institutional trading.