DALLAS - Merrill Lynch & Co. has transferred some key municipal bond executives to TheMuniCenter and hired several others as part of a move to beef up the staff of the Internet-based secondary-market municipal bond trading platform, the online firm said yesterday.
Paul Palmeri, the former head of Merrill Lynch's municipal trading, underwriting, and risk management who was most recently overseeing online fixed-income trading for the brokerage giant, will become chief operating officer at TheMuniCenter, whose Web site is www.themunicenter.com.
John Craft, former director of Merrill Lynch's public finance department, will manage institutional and issuer marketing. Besides Palmeri and Craft, Merrill Lynch transferred Patrick Fox, former director of municipal retail trading, and Sean Roche, a former marketing manager. Fox joins TheMuniCenter as a director and Roche as a vice president of marketing.
The move represents a major transfer of some of Merrill Lynch's senior municipal bond and public finance professionals to TheMuniCenter staff, and a major commitment on the part of TheMuniCenter's equity investors to the development of the Web site. Besides Merrill, the other Wall Street mainstays who are partners in owning the site include Salomon Smith Barney Inc., Morgan Stanley Dean Witter, and Chapdelaine Electronic Brokerage.
Palmeri, most recently managing director of North American debt electronic-commerce trading at Merrill Lynch, said the move was part of the firm's strategy of moving key executives into e-commerce positions. It is expected to significantly strengthen TheMuniCenter given Palmeri's role in developing new fixed-income e-commerce platforms for Merrill Lynch.
" Merrill Lynch has taken a lot of senior people and put them into e-commerce," Palmeri said. "We have placed our bets on a few strategic spots, and we plan to do what we can to make them work. All the consortium members are committed to the success of TheMuniCenter."
Other new hires at TheMuniCenter include: Edward Holleran, former head of Southeast brokerage at Chapdelaine, who will run the center's broker-dealer effort as a director; Michael Sullivan, former vice president and portfolio manager for GE Asset Management, who will run the center's institutional marketing effort, also as a director; Moira Higgins, former director of sales at Deutsche Bank, who will work in institutional marketing; and David Marcinowski, formerly of Chapdelaine, who will work in the center's brokerage division.
Tom Vales, TheMuniCenter's chief executive officer, commented that "the ability to attract top talent is further support of our business model."
Though TheMuniCenter's platform has been operating quietly for about a year, the four equity investors did not officially announce the creation of TheMuniCenter until this May. Billed as a multidealer business-to-business electronic-commerce system for municipal bonds, the platform was built on a trading system Chapdelaine had developed with Merrill Lynch.
TheMuniCenter's platform is available to all municipal participants, with 4,000 individuals already signed up to use the service at 400 subscriber firms. The goal is to make the municipal market more efficient and improve liquidity by creating a central market on a consolidated trading platform where participants can trade anonymously. The owner firms have committed significant inventory and personnel to the venture.
TheMuniCenter platform is just one of several announced in the past year to bring electronic trading services to the municipal market. The platform gives broker-dealers and electronic brokers the ability to buy and sell municipal securities in a live, centralized trading system.
Of the several other platforms launched, TheMuniCenter is seen as one of the strongest and is expected to carve out a large market niche given the collective brainpower, capital, and inventory behind the Web site.
Palmeri said the firm's platform stands apart from others because the strong commitment from its owners gives it one of the largest electronic inventories of municipal bonds.
"We see the business changing with the markets going to electronic trading," Palmeri said. "We are already doing what a number of other platforms are trying to do."
