Stan O'Neal was yesterday battling to save his job as chairman and chief executive of Merrill Lynch amid mounting criticism by outside directors of his performance.
The move to oust him is being led by Armando Codina, a Cuban-American businessman close to the family of President George Bush, who was angry that Mr O'Neal last week approached Wachovia, the fourth-largest US bank, about a possible merger without prior approval from the board.
Merrill shares, hit this week after the company announced nearly $8 billion of losses on mortgage-backed securities, rose 4 per cent on speculation Mr O'Neal might be ousted and a deal was possible.
Despite the scale of the losses, which were almost double the figure Merrill announced less than three weeks ago, Mr O'Neal appeared to have the backing of directors at a meeting last week.
People close to Mr O'Neal say that until the leak on Wachovia, he had been confident of keeping the board's support.
Aside from yesterday's rally, Merrill's share price has fallen steadily as analysts have predicted the company could face further heavy losses on its securities holdings in the fourth quarter.
