Shares of financial giant Merrill Lynch (NYSE: MER) have been taking a beating in today’s market, extending its two week losing streak. A research note out of Deutsche Bank AG stated today Merrill may be about to writedown as much as $10 billion in relation to its subprime losses.
Rumors have been swirling all around Merrill lately, and now it appears as though the SEC is going to be investigating charges that the company used deals with hedge funds to delay its subprime losses. As Lita Epstein writes in her SEC probe article:
“Initial reports indicate Merrill Lynch sold commercial paper to hedge funds with promises of buying it back a year later and guaranteeing the hedge funds a minimum return.”
Definitely some serious charges there. Shares of MER are currently trading down 8.1% to $57.13, and traded down as low as $54.00 earlier in the session.
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