Merrill’s Internal Controls Worked

The WSJ has issued a retraction on their story around the supposed deal by Merrill to move risky assets off balance sheet to hedge funds while guaranteeing a return.

In its correction on Monday, The Journal said that the deal didn’t go through. “Merrill didn’t complete the deal after the firm’s finance department determined it didn’t meet proper accounting criteria,” the paper said in its correction. “In addition, Merrill says it has accounted properly for all its transactions with hedge funds.”

Note the phrasing “didn’t meet proper accounting criteria.”  Translate, someone on the trading side thought it was a good enough idea to get the accountants to look at it.

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