Very rarely do we ever see Wall Street fire executives. We hear lots of talk about pursuing other opportunities or spending time with the family, but rarely that an executive was fired due to poor performance. Lower echelon employees get the ax all the time, but executives tend to slide out unless they commit fraud or sexual harassment.

So Merrill Lynch’s firing of two top executives was a surprise to the street. When Osman Semerci and Dale Lattanzio were fired over the losses that Merrill Lynch will be facing over the coming years due to bets made on subprime loans you know that the proverbial excrement in flying.

These firings coming just before Merrill’s 3^rd quarter earnings report portends bad news for the firm. With a 4 billion dollar write down of bad debt already announced my guess is that Merrill has even more problems in it’s cupboard which will come out in mid October.

The dismissals are the latest sign that investment banks, facing big losses after years of big profits, are moving quickly to hold senior executives accountable for having succumbed too readily to the credit and buyout boom. Bear Stearns fired its co-president, Warren J. Spector, in August; Huw Jenkins stepped down early this week as the chief of UBS’s investment bank; and in February, HSBC dismissed the head of North American business, Bobby Mehta.
Several banks have also reported large write-downs in the quarter, including Citigroup, which this week said it would write off $5.9 billion in the third quarter, causing its profit to drop 60 percent. via the New York Times.

Related posts:

1. Wall Street Feeling Positive About Home Builders
2. Remember The AIG Bailout? It Should Be Called The Goldman Sachs Bailout
3. Quarter of All Commercial Loans Coming Due in Next 4 Years Underwater
4. Who Is Watching Fannie And Freddie? Answer Nobody Now. Internal Auditor Fired