Merrill Lynch: The Cost Could Be Fatal: My War Against Wall Street's Giant

Rating:
Summary: admire Keith's courage to fight against ML by himself
Review: After read his book, I really admire Keith's courage to fight against Merrill Lynch by himself. It tooks him a lot of time, energy, money to fight for his believing. I was a Merrill Lynch empolyee as financial advisor and was wrongfully terminated. After read this book, I was filled with the courage to fight against the giant firm. Email me at [e-mail].

Rating:
Summary: Diogenes doesn't invest at Merrill Lynch
Review: At the core of this book is an examination of the same moral and ethical issues with which Plato grappled in "The Republic". If this book were a metaphor for classical Greek philosophy the author is Socrates whose disbelief in the state's gods cost him dearly. The state is Merril Lynch and its gods are the willingness to eschew corporate ethics and values.

In a perfect world this book would be a shocking exposé, but this isn't a perfect world. Instead, this book tells a story of corporate misdeeds, incestuous relationships among Wall Street, the SEC and the National Association of Securities Dealers - each of which are supposed to be interlocking parts of a system of checks and balances, with the whole resting upon justice that is supposed to be guaranteed by our legal system. As the story unfolds the parts are exposed as illusions built upon a shaky foundation. What is fascinating is the way Merrill Lynch attempts damage control as their position is threatened. They first use subtle persuasion, then increasing levels of intimidation, and finally cast off the veneer of their ethical image by raw threats. Along the way they sacrifice some of their own loyal (but flawed) managers who attempted to contain the growing mess, and circumvented laws when they could get away with it. In other words, a common story of the dark uses of sheer power that would make Machiavelli proud.

However, this isn't a common story. Keith Schooley does what other authors of this kind of book doesn't: he names names. He also carefully and meticulously builds his body of facts and supporting evidence, and does so with surprisingly good narrative for someone who is not a professional writer. The character of each person who played a role is accurately portrayed. Each event is documented in detail, and Keith's analysis of situations is objective and logical. It's the personal perspective that makes this story such a good read because Mr. Schooley's persistence in the face of one disappointment after another is an inspiration to those of us who would be tempted to take the easy way out if faced with the same circumstances.

If this book did anything it's rekindled my passion for justice, and has reaffirmed my conviction that there are people whose sense of honor and integrity will not be compromised no matter the cost. Mr. Schooley, if you're reading this, know that most of those who signed the Declaration of Independence had ignoble ends on a personal level, but made a difference on a much larger scale that has endured time. Your personal integrity may not have the same impact as theirs, but you deserve to stand alongside them. I think the court of public opinion will agree.

Rating:
Summary: Nothing sensational and no real dirt
Review: I agree that the story is sad and the author got the short end. That said, this isn't the Greek Tragedy that some seem to imply, nor is it a realistic account of David versus Goliath in the strictest sense.

First, Mr. Schooley brought much of the mess on himself. Not for raising the issues and bringing them to the attention of Merrill Lynch's management, but for hiding behind a facade of ethics and integrity while refusing to meet the company's internal investigators half way. Would that have compromised his ethics or integrity? I don't believe so.

Merrill Lynch's first responses seemed to include a sincere effort to resolve the complaints to the satisfaction of all. While Mr. Schooley refused to budge from his demands which he claims were based on integrity, he also had strange ideas about integrity. While he was rolling dice with his family's future by rocking the boat, he neglected to let his wife in on what he was doing. That is deceit, not integrity and is only different from adultery is degree.

Second, this book is supposed to be evidence placed in the court of public opinion. Yes, the public will side with Mr. Schooley because we always root for the underdog and he was treated unfairly. If he thinks that this book will make a difference in Merrill Lynch's bottom line I contend that he's naive. The public will do what the public does. They'll feel sorry for him, but will not hesitate for a second to follow Merrill Lynch's investment advice if it'll make them money. That's the way life works.

Third, I take issue with the claims made by Mr. Schooley and the attorney who wrote the forward that arbitration is a bad thing. From personal experience I think arbitration is useful, especially in our society where we litigate at the drop of the hat. Of course an attorney is going to oppose arbitration because in most suits the only winners are the attorneys.

I do recommend this book because does have lessons to be learned. What those lessons mean is up to you. The story reads well in spite of bogging down in places in the beginning. It has the usual metaphors reported by others: Greek tragedy, Biblical David versus Goliath, and the more philosophical Good vs. Evil. It even has a bit of Karmic irony. After Mr. Schooley's life started falling apart which included a divorce his ex-wife went to work for Merrill Lynch. What it doesn't have is anything that will cause the same outrage as the Enron debacle. You'll have to look elsewhere for that kind of story.

Rating:
Summary: Nothing sensational and no real dirt
Review: I agree that the story is sad and the author got the short end. That said, this isn't the Greek Tragedy that some seem to imply, nor is it a realistic account of David versus Goliath in the strictest sense.

First, Mr. Schooley brought much of the mess on himself. Not for raising the issues and bringing them to the attention of Merrill Lynch's management, but for hiding behind a facade of ethics and integrity while refusing to meet the company's internal investigators half way. Would that have compromised his ethics or integrity? I don't believe so.

Merrill Lynch's first responses seemed to include a sincere effort to resolve the complaints to the satisfaction of all. While Mr. Schooley refused to budge from his demands which he claims were based on integrity, he also had strange ideas about integrity. While he was rolling dice with his family's future by rocking the boat, he neglected to let his wife in on what he was doing. That is deceit, not integrity and is only different from adultery is degree.

Second, this book is supposed to be evidence placed in the court of public opinion. Yes, the public will side with Mr. Schooley because we always root for the underdog and he was treated unfairly. If he thinks that this book will make a difference in Merrill Lynch's bottom line I contend that he's naive. The public will do what the public does. They'll feel sorry for him, but will not hesitate for a second to follow Merrill Lynch's investment advice if it'll make them money. That's the way life works.

Third, I take issue with the claims made by Mr. Schooley and the attorney who wrote the forward that arbitration is a bad thing. From personal experience I think arbitration is useful, especially in our society where we litigate at the drop of the hat. Of course an attorney is going to oppose arbitration because in most suits the only winners are the attorneys.

I do recommend this book because does have lessons to be learned. What those lessons mean is up to you. The story reads well in spite of bogging down in places in the beginning. It has the usual metaphors reported by others: Greek tragedy, Biblical David versus Goliath, and the more philosophical Good vs. Evil. It even has a bit of Karmic irony. After Mr. Schooley's life started falling apart which included a divorce his ex-wife went to work for Merrill Lynch. What it doesn't have is anything that will cause the same outrage as the Enron debacle. You'll have to look elsewhere for that kind of story.

Rating:
Summary: What Whistle?
Review: Memoirs are necessarily selective and subjective. They simply cannot cover everything as they share the thoughts and feelings as well as the perspectives and opinions of their author. to the extent that author wishes to share them (selectively). My own experience suggests that, in the "alley" of contemporary business, most of the "cats" are gray. It is therefore important to keep in mind that this is Schooley's account of what he believes happened...and did not happen...during his association with Merrill Lynch and thereafter. To his credit, he draws upon as many primary and secondary sources as possible to establish what he calls the "record," one which "can speak for itself."

What does it say? First, that an earnest, eager, and ambitious young man went to work for Merrill Lynch with the proverbial "high hopes" and "great expectations"; by the time he concluded his relationship, he had lost all respect for Merrill Lynch's organizational integrity. In this book, he explains why. Also, various circumstances and developments forced him to conduct rigorous soul-searching. Was he naive? Were his requests unreasonable? Should he have conducted himself differently? Was it all worth it to challenge such a large and powerful organization? Schooley responds to these and other questions in his book. Finally, the book says (to me at least) that it is difficult but not impossible for an individual to initiate and then sustain such a challenge. Perilous? Of course. Doomed to failure? Not necessarily.

Dante reserved the last (and worst) ring in hell for those who, in a moral crisis, preserve their neutrality. According to Schooley, there were many senior-level executives within the Merrill Lynch organization who did so as did officials at various regulatory agencies. I admire Schooley's efforts to act upon his principles when he composed a memorandum for Merrill Lynch's senior managers, informing them of various improprieties and possible illegalities as well as efforts to conceal them. I admire his efforts even more after he was dismissed and then threatened with litigation unless he remained silent (i.e. preserving his neutrality). His personal as well as professional sacrifices were numerous and substantial. Nonetheless, he persevered.

As Schooley's reader, I have no reason to question his sincerity or integrity and am unqualified to comment on the merits of his allegations. Nor do I presume to suggest that his book will achieve all of the objectives he had in mind when he wrote it. (Organizations as large and complicated as Merrill Lynch remind me of the fact that "jumbo" oil tankers must travel approximately 30 miles to reverse their direction.) I rate this book so highly because I think it raises a number of questions which must be addressed by senior-level corporate executives, especially now as other allegations are made by other Schooleys in their respective organizations. Schooley obviously believes that our society needs more "white cats" and fewer "black "cats," not only in the private sector but in publicly-funded regulatory agencies which have fiduciary responsibility to all citizens. Within the limitations of the memoir genre, I think this is a brilliant achievement.

Rating:
Summary: Modern lessons in integrity and ethics
Review: This book has four levels:

(1) A personal account of an individual of high moral integrity who took a stand against a large, powerful corporation and lost. At this level the book is a moral compass for each of us because as the story unfolds there are indications of compromises that could have been made on both sides that would have possibly influenced the end result.

(2) Valuable lessons for both whistle blowers who feel an obligation to do the right thing, as well as corporate management for containing and controlling unwanted bad publicity. I do not think the author intended the latter, but it's there.

(3) A tale of raw corporate power and an ineffectual regulatory oversight by the government.

(4) An eye-opening lesson on the differences between arbitration and jury trials and an examination of critical clauses in employment agreements.

A synopsis is that the author worked at Merrill Lynch, and shortly after joining discovered that the reputation for integrity and ethics upon which the company grew into a powerhouse corporation was flawed when viewed from the inside. He naively attempted to bring it to management's attention, and eventually brought it to the attention of the board of directors. His actions triggered a response that attempted to contain the situation, but escalated when internal investigators and the author were unable to agree on a resolution that was satisfactory to all parties. This escalated into termination, an attempt at resolution in a jury trial and the discovery that he was obligated to submit to arbitration, which he lost.

The story is illuminating, but the heart of this book is the issues of ethics, integrity and where does one draw the line. Reading the book I spotted a number of occasions where this episode could have had a happy ending if the author would have yielded to a degree. However, this is the crux of the matter - where is the line between true integrity and selling out? To me that was the real question and one for which I still don't have a definitive answer. I like the way the author fairly and objectively treated all of the players, which speaks highly of his personal integrity. However, I was also able to see the efforts that Merrill Lynch were making to reach a compromise. On one side is the author's unbending integrity, and on the other a group trying to protect shareholder value and the company's reputation in a large organization that, by its nature could not be immediately changed.

Most readers who work for large corporations will relate to the disparity of their company image as projected to the public versus the reality of what goes on inside. Some will even relate to the moral and ethical dilemmas the author faced, and this book will perhaps inspire some to go with their conscience and others to take the easier path. Regardless of the path chosen, the story is a real life examination of integrity and ethics and how they relate to contemporary business values. It would make an excellent case study in a course on business ethics. It's also a book that should be read by anyone whose profession has a code of professional ethics.

Rating:
Summary: A Securities Industry Whistleblower's Profile in Courage
Review: This book is a profile in courage of how a private attorney general suffered great personal costs while attempting to uncover corporate wrongdoing in order to serve the public interest. Keith Schooley's well-written book is an odyssey of his struggles with Merrill Lynch management that took him on a journey through nearly every regulatory agency, a blue-ribbon arbitration panel, and finally the Tenth Circuit of the U.S. Court of Appeals.

Mr. Schooley describes in detail how the "powerful and mighty" play the game inside and outside of a court of law, including unethical and perhaps illegal activities. It is a powerful story of the personal costs of whistleblowing and doing the right thing as well as an insider's guide to the world of the securities industry. This book provides insights into institutions such as the Wall Street security moguls, regulatory agencies, arbitration, and the court system.

In view of the current climate of corporate scandals - Enron, Arthur Anderson, WorldCom, Adelphia, and others - Schooley's book is an important one that offers a hard and disturbing look at Wall Street's largest securities firm. As a former employee of Merrill Lynch, Schooley gives a backstage view at what goes on behind the impression-managed frontstage. The public relations voice of corporate America differs significantly from the reality. Mr. Schooley documents a pattern of problems at the firm ranging from brokers to senior management, and suggests that the problems could be even be traced to the board of directors.

This is a book that should be read by not only Merrill Lynch clients, but all investors. Law students and lawyers interested in employment law, securities law, and tort law would also find it a valuable case study of corporate wrongdoing. Finally, undergraduate students interested a career in the securities interest will learn about the perils of the securities industry from this insider's guide.

Michael L. Rustad
Thomas F. Lambert Jr. Professor of Law
Suffolk University Law School
Boston, Massachusetts




Rating:
Summary: Goliath 1, David 0 - a sorry tale of punished ethics
Review: This is a chronicle of one man's attempt to do the right thing only to pay a high price in his personal and professional life. The book opens with a quote from Merrill Lynch's corporate counsel made then the author joined the firm, "[b]ut let integrity slip and take second place to revenue - then it will cost more than dollars. The cost could be fatal." This sets the background in what was to become a war of one rookie financial consultant against hypocrisy and internal expediency that was the opposite of the lofty rhetoric of the corporate counsel.

As the story unfolds there are interesting dynamics among the corporate organism and some of the players that emerge, and a clear indictment of the government oversight and industry self-regulation that were supposed to quickly address and remedy the incidents that the author reported. An example of the dynamics is shown when one of the managers who was ultimately fired as a result of the author's whistle blowing assisted the author. His motivation had nothing to do with new found ethics or conscience as much as revenge. The cavalier and bumbling manner that characterized the NASD investigation of the author's allegations. It gets worse: one of the Merrill Lynch senior executives against whom charges of wrongdoing that was to be investigated was actually serving as a member of the NASD District Business COnduct Committee in the district charged with the investigation. The posturing by Merrill Lynch executives, the documented evidence that they were more concerned with damage control than remediation, and the incredible power they wielded over government and industry overseers only added to an appalling, but not surprising story. The reason it's not surprising is that the Enron story has prepared many who read this book for what should be shocking revelations. I fear, though, that many of us have grown jaded and cynical by that debacle. However, this is a story about a real person and not a faceless mass of shareholders, which adds a personal touch.

The bottom line is that through a legal clause the author could not have his day in court. Instead he was forced to go through arbitration and lost. That too is no surprise since the same internecine relationship between Merrill Lynch and NASD and the government existed with those who professionally arbitrate in that industry.

A few things about the story - there is no bitterness or rancor on the part of the author. He is fair and objective, and writes in an even manner. He names people by name, has thoroughly documented the episode and has left it to the body of readers to be the court of public opinion. The book is a good read, and it may just expose some of the fallacies in the very systems that are designed to protect us as individuals, consumers and shareholders.

Rating:
Summary: "The Insider" it is not
Review: This is the kind of self-aggrendizing drivel you should expect in a self published book. I guess no one else was interested in publishing the story.

The author worked in a tiny offie in a backwater town and took it upon himself to contact "senior management" in wiritng. I bet he is writing to Bush about the war in Iraq as we speak. I'm sure he will be self-publishing a new book very soon about how Bush ignored his concerns and tried to get his day in international court in The Hague.

Save your money and by a book from an author who didn't have to pay to get it published.

Rating:
Summary: Cub scout in a den of vipers
Review: What happens if a stand-up kind of guy decides to follow the written code of ethics in his brokerage firm? Welll, the result is as if you sent a cub scout to join a den of vipers.

Keith Schooley, tired of the rollercoaster world of oil investing in Oklahoma, turned his hardworking skills to brokering for Merrill Lynch. He did well on all his exams, he was one of the top 10 rookie producers for his area. He read all the required codes of behavior and ethics as set down by the brokerage industry, and monitored by the SEC and the NSAD, the internal brokerage self-regulating body.

Schooley soon found out that his office co-workers and supervisors were playing a bit fast and loose with their own guidelines in order to pass exams and win contests. When Schooley notified Merrill Lynch of violations of the ethics code as set down in their own documentation, his findings were hardly received with cries of joy. Rather, a cover-up on the scale of the Watergate break-in resulted.

While the violations that Schooley uncovered were not of the type that got Michael Milliken and Ivan Boesky in trouble, they were disturbing. Financial institutions hold themselves to a strict code (theoretically) of behavior because they deal with other people's money. This is why the words "fidelity" and "fiduciary" and "trust" are adjectives in so many financial institution names. Their self-regulating bodies and the SEC are supposed to watch over their activities and punish unacceptable behavior. But "quis custodiet custodes ipsos?" or "who's watching the watchers?" The effectiveness of the self-regulating NSAD was a bit like asking the mastiff to guard the roast.

Schooley became obsessed with getting justice and setting things to rights. He ended up escalating the incidents to the point where his entire life was consumed.

What's interesting about this book is NOT the nature of the scandal; frankly this is small beans compared to some of the violations we've seen in the courts. What is interesting is the peek into the inner world of a regional brokerage office. The culture encourages contests "pour le sport" that is, just for the joy of winning; the prizes were nothing these guys couldn't have put on their platinum cards. The contests were a way to one-up the next guy and for the bigger bosses to enrich their bonuses. As far as taking care of the customer, including doing all in the customer's best interest and fully informing a client about the financial products they were investing in, that was not even a consideration. As one supervisor put it "Just sell."

Why read this book? The arbitration proceedings, which form a greater part of the book, are interesting to see how these guys operate. The view into a brokerage office will make you think again about the trust and faith you may be putting in your own broker. More Latin: Caveat Emptor (Buyer Beware.)