Merrill Lynch & Co. Inc. said Tuesday that it had hired Michael Nierenberg from JPMorgan Chase & Co. to head its global mortgages and securitized products businesses, its latest step toward recovery from escalating mortgage losses.
In addition, Merrill said James De Mare will join it from Citigroup Inc. to run its mortgage trading operations.
At midday Merrill's shares were down about 2% from Friday's closing price, to $27.74. The stock price has fallen about 64% in the last year.
The hirings signaled that the New York company has resorted to bringing in executives from rival firms — rather than promoting from within — in its latest effort to turn around its ailing mortgage-related operations, which have been hurt by the credit crisis and housing downturn.
Danielle Robinson, a spokeswoman for Merrill, said that, though the posts are not new ones in the company, Mr. Nierenberg and Mr. De Mare are not succeeding anyone directly because the duties were most recently handled on an interim basis by other bankers.
"Both Mike and Jim are among the most highly skilled and knowledgeable people in the mortgage business," Thomas K. Montag, Merrill's head of global sales and trading, said in a press release.
Mr. Nierenberg most recently was the head of global securitized products at JPMorgan Chase after its purchase of Bear Stearns Cos. this year.
Previously, he held several posts at Bear Stearns, where he had worked since 1994. These included head of interest rate and foreign exchange trading operations, co-head of structured products, and co-head of mortgage-backed securities trading.
Before he joined Bear Stearns, Mr. Nierenberg also spent seven years at Lehman Brothers, where he helped build the investment bank's adjustable-rate mortgage business.
Mr. De Mare has worked at Citigroup and its predecessor Salomon Brothers for 11 years, most recently as global head of mortgage trading, overseeing the trading of all securitized products in the company's fixed-income, currencies, and commodities group. Before he joined Salomon, Mr. De Mare traded agency and nonagency adjustable-rate mortgages at Bear Stearns and Prudential Securities.
For its second quarter, Merrill reported a loss of $4.65 billion, or $4.95 a share, one of the worst performances in its history and more than twice as bad as analysts had been expecting.
Already clobbered by subprime-related writedowns of more than $30 billion in the three quarters through March, Merrill took an additional $9.7 billion hit in the second quarter, causing the bulk of the company's net loss.
John Thain, the former chief executive officer of the stock exchange operator NYSE Euronext, took over at Merrill in December as its mortgage-related losses escalated.
He quickly imposed new risk-management controls, brought in new talent, and has made a slew of other changes.
But the moves have not yet led to a rebound in Merrill's overall performance. It has had to raise $15.5 billion of capital since Mr. Thain's arrival and has not come close to turning a quarterly profit.