Merrill probes 'irregularity' in London operation

Investment bank Merrill Lynch today said it was investigating an “irregularity” within its trading operation in London.

The bank, now owned by Bank of America, has informed regulators and is working with authorities.

Merrill Lynch would not comment on reports naming a London currency trader as the focus of the investigation.

A spokeswoman said: “During a recent evaluation of certain trading positions, we discovered an irregularity.

“We informed regulators immediately and are working closely with authorities to thoroughly investigate the matter.

“Senior managers of the business are focused on the issue and believe the risks surrounding possible losses are under control.”

The announcement follows a report in the New York Times that attention was focused on the accounts of Alexis Stenfors, a foreign exchange trader.

His losses, when they came to light, were said to have so alarmed management at Bank of America that they examined the books of other traders who were on holiday.

Mr Stenfors recorded a trading profit for the year of about $120m (€94m), according to the New York Times, which quoted him as calling the issue a “misunderstanding”.

Bank of America is considered one of America’s healthier banks, but in January its acquisition Merrill Lynch announced a $15.31bn (€12.09bn) loss for its fourth quarter.