The sins of Orange County haven't yet been visited on Merrill Lynch--but the brokerage had a disappointing fourth quarter anyway. Profits fell 53%, to $162 million, on weakness across Merrill's businesses. Worse could come if Merrill has to take reserves for losses in Orange County, Calif., which, citing Merrill's role in the derivatives debacle, is suing for $2 billion. Even so, on Jan. 25, Merrill named as its President David Komansky, the executive ultimately responsible for the firm's Orange County dealings.

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