Merrill Lynch & Co.
Former American investment bank and securities firm that became part of Bank of America during the 2008 financial crisis.
Last updated August 26, 2026
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Overview
Merrill Lynch & Co. was a major American investment bank, broker-dealer, securities underwriter and financial-services group. Its origins date to January 1914, when Charles E. Merrill opened Charles E. Merrill & Co. at 7 Wall Street in New York. Edmund C. Lynch joined several months later, and the firm adopted the Merrill, Lynch & Co. name in 1915. Winthrop H. Smith joined in 1916 and later became one of the central figures in the firm's institutional development. The company built its early reputation through a combination of securities distribution, retail brokerage and aggressive expansion into corporate investments. In the 1920s it acquired Pathé Exchange, later associated with RKO Pictures, and acquired a controlling interest in Safeway. In 1930, Charles Merrill separated the retail brokerage operation from the investment-banking business, transferring much of the brokerage activity and many employees to E. A. Pierce & Co. The restructuring allowed Merrill to concentrate temporarily on investment banking while the related brokerage organization developed into one of the largest securities distributors in the United States. Merrill Lynch reunited with E. A. Pierce and Philadelphia-based Cassatt & Co. in 1940. In 1941, the combined organization merged with Fenner & Beane, a New Orleans securities and commodities firm. The resulting business became Merrill Lynch, Pierce, Fenner & Beane and emerged as a leading American brokerage and investment-banking organization. In 1952, Merrill Lynch & Co. was established as a holding company, and in 1958 the operating firm adopted the name Merrill Lynch, Pierce, Fenner & Smith and joined the New York Stock Exchange. During the post-war decades, Merrill expanded across securities brokerage, government bonds, fixed income, capital markets, corporate finance, asset management and institutional trading. Its acquisition of C. J. Devine & Co. in 1964 strengthened its government-securities business and helped support the development of money-market and government-bond products. The firm became particularly well known for its large network of financial advisers, often associated with the informal phrase “thundering herd,” while also building a substantial international institutional business in Europe and Asia-Pacific. From the late 1980s through the 1990s and 2000s, Merrill sought to compete more directly with global investment banks in international debt, equity, convertible bonds, fixed income and structured finance. It expanded in Canada, although it subsequently sold and reacquired Canadian businesses, and it developed a major presence in global capital markets. The firm also became deeply involved in mortgage finance and collateralized debt obligations. Its 2006 purchase of First Franklin Financial, a large subprime mortgage lender, increased its exposure to the housing and structured-credit markets. That exposure became critical during the subprime mortgage crisis. Merrill announced substantial write-downs in 2007, removed chief executive E. Stanley O'Neal, and appointed John Thain. Further losses, capital-raising efforts, asset sales and legal disputes followed in 2008. On September 14, 2008, at the height of the global financial crisis, Merrill agreed to be acquired by Bank of America. The transaction was completed in January 2009. Merrill Lynch & Co. was subsequently merged into Bank of America Corporation in October 2013. The Merrill Lynch name continued primarily as a Bank of America wealth-management and financial-services brand, while much of the former investment-bank business became associated with BofA Securities.
History
Merrill Lynch began in New York in 1914 when Charles E. Merrill opened Charles E. Merrill & Co. Edmund C. Lynch joined him during the first year, and the firm adopted the Merrill, Lynch & Co. name in 1915. Winthrop H. Smith joined in 1916 and later helped guide the organization through several important combinations and restructurings. The early company was not confined to securities. It acquired Pathé Exchange in 1921 and obtained control of Safeway in 1926, reflecting Charles Merrill's interest in corporate finance and operating-company investment. In 1930, Merrill separated the retail brokerage business from the investment-banking operation and transferred it to E. A. Pierce & Co. The move temporarily reduced Merrill's direct emphasis on retail distribution while allowing the associated brokerage business to expand its technological and communications infrastructure. Merrill Lynch, E. A. Pierce and Cassatt combined in 1940. The next year, the organization merged with Fenner & Beane, producing Merrill Lynch, Pierce, Fenner & Beane. This combination created one of the most important securities-brokerage networks in the United States. In 1952, Merrill Lynch & Co. was formed as a holding company. The operating firm became Merrill Lynch, Pierce, Fenner & Smith in 1958 and joined the New York Stock Exchange. The firm broadened its market capabilities after the war. Its 1964 acquisition of C. J. Devine & Co. added expertise in U.S. government securities and supported the development of government-bond funds and money-market products. Merrill also built a large adviser network serving individual investors and developed institutional sales, trading and underwriting businesses. Its international expansion included activities in Canada, Europe and the Asia-Pacific region. During the late twentieth century, the company increasingly competed as a global capital-markets institution rather than only as a domestic retail brokerage. In the late 1980s and 1990s, Merrill expanded its international bond, fixed-income, equity and convertible-securities businesses. The firm sought to connect U.S. and European issuers with global investors and to establish round-the-clock market coverage. It also participated in corporate acquisitions and investments outside its core securities operations, including its 1998 purchase of Midland Walwyn in Canada and a minority investment in Japan's TMS Entertainment in 2003. The firm entered the 2000s with a broad platform spanning wealth management, investment banking, institutional markets, prime brokerage and asset management. It became a significant participant in the collateralized-debt-obligation market. The 2006 acquisition of First Franklin Financial increased its connection to subprime mortgage origination. Merrill underwrote many mortgage-related CDOs and retained exposure to portions of them as the U.S. housing market deteriorated. The resulting losses weakened the company during the 2007–2008 financial crisis. Merrill disclosed large write-downs, changed chief executives, sold assets and raised capital from investors including Temasek Holdings. It also faced disputes and regulatory pressure involving mortgage securities and auction-rate securities. On September 14, 2008, Merrill agreed to be acquired by Bank of America. The acquisition closed in January 2009, after which the independent company ceased operating as a standalone public investment bank. The legal entity was later merged into Bank of America Corporation in October 2013. The Merrill name survived within Bank of America's wealth-management franchise, while the former investment-banking activities were integrated into the parent company's institutional securities operation.
- 2013
Corporate merger into Bank of America
[1]Merrill Lynch & Co. is merged into Bank of America Corporation.
- 2009
Acquisition closes
[1]Bank of America completes its acquisition of Merrill Lynch in January.
- 2008
Agreement to be acquired by Bank of America
[1]Merrill agrees to a Bank of America acquisition during the global financial crisis.
- 2006
First Franklin acquisition
[1]Merrill purchases First Franklin Financial, expanding its exposure to subprime mortgage origination.
- 1998
Midland Walwyn acquisition
[1]Merrill Lynch acquires Midland Walwyn and re-enters Canada's personal-investment market.
- 1964
C. J. Devine acquisition
[1]Merrill acquires C. J. Devine & Co., strengthening its U.S. government-securities business.
- 1952
Holding company is formed
[1]Merrill Lynch & Co. is established as a holding company.
- 1941
Fenner & Beane merger
[1]The organization merges with Fenner & Beane and becomes Merrill Lynch, Pierce, Fenner & Beane.
- 1940
Merger with E. A. Pierce and Cassatt
[1]Merrill Lynch combines with E. A. Pierce & Co. and Cassatt & Co.
- 1930
Retail brokerage is separated
[1]Merrill transfers its retail brokerage operation to E. A. Pierce & Co. and focuses on investment banking.
Products and positioning
Historically positioned as a full-service securities firm combining a mass-affluent and high-net-worth adviser network with global investment banking, institutional markets and capital-markets capabilities. After the Bank of America acquisition, the Merrill name became principally associated with wealth management, while investment-banking operations were integrated into the parent company's institutional business.
Wealth management
Retail brokerage and financial-adviser network
Merrill's large adviser network served individual investors with brokerage, investment advice, securities distribution and related financial-planning services. This client-facing franchise became the most visible continuing part of the Merrill brand after Bank of America acquired the company.
Investment banking
Investment banking and underwriting
The firm advised corporations, governments and institutions on equity offerings, debt issuance, mergers, acquisitions and other capital-markets transactions. Its international expansion made it a significant competitor in global debt, equity and convertible-securities markets.
Securities markets · 1964
Government securities and fixed income
Following the C. J. Devine acquisition, Merrill developed a strong U.S. government-securities and fixed-income platform. The business supported government-bond funds, money-market products, institutional trading and broader capital-markets activities.
Structured finance
Collateralized debt obligations
Merrill became a leading underwriter of mortgage-related collateralized debt obligations during the 2000s. The business generated substantial underwriting activity but also left the company exposed to rapidly declining valuations when the subprime mortgage market deteriorated.
Mortgage finance · 2006
First Franklin mortgage lending
First Franklin Financial was a mortgage lender acquired by Merrill in 2006. Its subprime-origination activities supplied loans that could enter structured products and increased Merrill's exposure to the U.S. housing downturn.
Controversies
2009
MBIA litigation over mortgage CDOs
MBIA alleged that Merrill misrepresented the quality of mortgage-related CDOs underlying credit-default-swap insurance contracts. A court later rejected most of the claims while allowing a breach-of-contract claim to proceed at that stage.
2009
Rabobank litigation concerning the Norma CDO
Rabobank sued Merrill over the Norma CDO and alleged that the transaction involved problematic asset selection and conflicts connected with the mortgage-securities market.
2007
Subprime mortgage and CDO losses
Merrill suffered extensive losses from mortgage-backed securities and CDO exposures during the subprime crisis. Its involvement included underwriting CDOs, retaining related positions and owning First Franklin, a subprime mortgage lender.
1994
Orange County investment losses and settlement
Orange County, California, filed for bankruptcy after losses associated with a leveraged investment portfolio managed by county treasurer Robert Citron. Merrill was among the securities firms sued and agreed in 1998 to pay $400 million to settle the county's claims without admitting liability.
Brand decisions
2008
Agree to Bank of America acquisitionM&ABackground
Merrill faced severe mortgage-related losses and liquidity pressure during the global financial crisis.
Action taken
Merrill agreed to be acquired by Bank of America on September 14, 2008.
Aftermath
The transaction closed in January 2009 and ended Merrill Lynch & Co.'s independent existence.
2007
Replace E. Stanley O'Neal with John ThainOtherBackground
Merrill disclosed major subprime-related write-downs and faced worsening market conditions.
Action taken
The company removed E. Stanley O'Neal and appointed John Thain as chief executive.
Aftermath
Thain pursued management changes, asset sales and capital raising as Merrill attempted to stabilize its balance sheet.
2006
Acquire First Franklin FinancialM&ABackground
Merrill was expanding its mortgage and structured-finance capabilities during the housing and credit boom.
Action taken
The company purchased First Franklin, a significant subprime mortgage lender.
Aftermath
The acquisition increased Merrill's exposure to subprime mortgage origination and mortgage-linked structured products before the market collapse.
1930
Separate retail brokerage from investment bankingStrategyBackground
Charles Merrill sought to restructure the business during the early Depression-era securities market.
Action taken
The retail brokerage operation and much of its workforce were transferred to E. A. Pierce & Co., while Merrill concentrated on investment banking.
Aftermath
The related brokerage organization became a major U.S. securities distributor and later recombined with Merrill.
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