Merrill Lynch ousts CEO O'Neal

By Tim McLaughlin

NEW YORK (Reuters) - Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research, Stock Buzz) ousted Chairman and Chief Executive Stan O'Neal on Tuesday, just days after reporting the biggest quarterly loss in the company's history, making him the highest-ranking casualty in the U.S. subprime mortgage crisis.

The world's biggest brokerage said board member Alberto Cribiore, a veteran deal maker, will serve as interim nonexecutive chairman, while day-to-day operations will be overseen by Merrill's current co-presidents, Ahmass Fakahany and Greg Fleming.

Cribiore, founder of private equity firm Brera Capital, will chair a search committee to find a permanent successor.

Fleming, a star investment banker, will oversee the company's business segments. His duties also include oversight of risk management, a task previously associated with Fakahany, who the company said will lead global support, finance and human resource functions.

Merrill's stock fell 3 percent to close at $65.56 on Tuesday and is down 30 percent this year.

Michael Holland, who oversees $4 billion of assets at Holland Co, said the market seemed to be saying Merrill's troubles are not over.

Holland said he was surprised Fakahany remains in leadership. Before the announcement, sources told Reuters he was expected to resign and later added they still did not expect Fakahany to remain over the long term.

"Fakahany, wasn't he the guy who was responsible for this series of problems?" Holland said. "It's at least quizzical that the person who remains in charge is in some ways directly responsible for the problems. ... O'Neal has lost his job because of these mistakes, and some people are asking how can the person in charge of risk management still be there."