Second Bank Board to Face Election Challenge in 2008

WASHINGTON, Jan. 16 /PRNewswire/ -- Demanding accountability from a Board whose oversight failures cost shareholders $35 billion in 2007, the CtW Investment Group has called on four Merrill Lynch (NYSE: MER) directors to describe what they did to protect shareholders from excessive mortgage-related risk over the past two years.

"Merrill Lynch's appalling failure to manage risk destroyed 43 percent of the firm's value in one year and contributed to a broader crisis of confidence now afflicting the financial markets," said William Patterson, Executive Director of the CtW Investment Group. "Former CEO Stanley O'Neal's unceremonious departure does not absolve the board from ultimate responsibility. This proxy season, shareholders will demand accountability, starting with the individual directors most responsible."

In letters sent today, CtW asked directors Alberto Cribiore, John D. Finnegan, Ann N. Reese, and Charles O. Rossotti - all members of the Finance Committee responsible for financial risk oversight at Merrill - to explain in detail what they did to understand the company's exposure to mortgage-related risk and how they satisfied themselves that management was properly controlling such exposure.

Since none of the Finance Committee members are up for election this year due to Merrill's classified board, the group said that, absent a compelling explanation from the Finance Committee members or a change in the Committee's composition, it will encourage shareholders to withhold votes from Armando Codina, chair of the Nominating Committee that appointed Finance Committee members and insulated them from accountability to shareholders by maintaining a staggered board.

"Merrill's Board failed shareholders repeatedly," said William Patterson, Executive Director of the CtW Investment Group. "They failed to prevent Merrill from incurring excessive risk as it plunged headlong into complex mortgage-related debt; they failed to monitor former-CEO Stanley O'Neal while he designed and implemented those risky strategies; and they failed to even create the position of 'Chief Risk Officer' until September 2007."

Earlier this week, the CtW Investment Group called on five Citigroup directors to explain what they did to protect that company's shareholders from excessive mortgage-related risk over the past two years.

The CtW Investment Group works with pension funds sponsored by unions affiliated with Change to Win, a coalition of unions representing nearly 6 million members, to enhance long-term shareholder value through active ownership. These funds, together with public pension funds in which CtW union members participate, have about $1.4 trillion in assets and are substantial long-term Merrill Lynch shareholders.

** Note: For additional information and to obtain copies of CtW's letters to the four Merrill directors, please contact Michael Garland, Director of Value Strategies, at 212-290-0308. CtW's letters to the five Citigroup directors are available at www.ctwinvestmentgroup.com. SOURCE CtW Investment Group

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