In a new book that traces the rapid undoing of Merrill Lynch, few of the protagonists are painted in a favourable light.One of the villains is Osman Semerci, the former head of fixed income for Merrill who is described in the book as having been aggressive, reckless, malicious and deceitful while he was working at the bank.
Called All the Devils Are Here (and an excerpt of which appeared in the November Vanity Fair issue and was republished at Here is the City), the book has one particularly interesting passage that alleges that Semerci taped $10,000 in cash under desk drawer – and refused to comment on the story.
After tons of media attention, Semerci is now vehemently denying that he kept wad of notes taped under his desk.
Here’s the passage he denies, as excerpted in November’s Vanity Fair:
In early October, [CEO Stan] O’Neal finally did something many at Merrill thought he should have done much earlier. He fired Sermerci. As he was being escorted out of the door according to one H.R executive, Semerci asked that someone retreive some money taped inside a drawer in his desk. When the security personnel went to get the money, they discovered it was nearly $10,000 in sequential hundred dollar bills.
Merrill announced horrible earnings soon after. The insinuation is career-destorying.
So Semerci is fuming.
Even the no-comment line is a lie, his attorneys say. They claim that Semerci did provide the magazine and the authors with written answers, but they ignored them.
Here’s part of the lawyer letter that was sent to Here is the City after they republished the excerpt:
As Vanity Fair and the authors well know from the detailed, truthful written answers, corroborated by public and other credible sources, which Mr. Semerci provided in response to pointed questions posed by Vanity Fair and the authors over the past several weeks, there is no truth to the authors’ account of Mr Semerci’s role as Global Head of FICC or the completely sensationalized story that he kept $10,000 in a desk drawer in an office in New York.
In fairness to Semerci, the book slams him. Of course he’s mad.
Here are some of the most incriminating details alleged in the Vanity Fair excerpt, The Blundering Herd.
- He had a reputation for being a nasty boss: “He was in your face,” says a former Merrill executive. “[I]f you got on his bad side he would write your name down.’ Merrill traders used to call it the Blacklist.”
- One former bank exec claims Semerci didn’t even understand U.S.-based risk and was not equipped to run a mortgage desk.
- Apparently Semerci demanded that a veteran and highly-respected Merrill trader be fired, along with “those close to him” so that he could assemble his own team of execs and traders.
- He allegedly had the risk manager banned from the trading floor and forbade his traders from speaking with him.
- He is said to have lied about the firm’s exposure to sub-prime mortgage risk, claiming that the risk on the firm’s books was no more than $83 million (“behind Semerci’s back, these executives began calling his loss estimates ‘the fantastic lie'”).
- And then when he did finally admit there might be some losses, he insisted they would amount to only “a couple of hundred million” at first, and then that perhaps the loss might reach $1.3 billion. When in fact, “In less than a year, Osman Semerci and his team had taken [veteran trader] Kronthal’s $5 to $6 billion worth of exposure and turned it into a $55 billion exposure.”