Merrill Lynch CEO John Thain continues to remake the company in the image of his old firm, Goldman Sachs.
Merrill has had serious discussions to hire Peter Kraus, who until recently was a top executive at Goldman, and may be best known as one of the most prominent investment bankers on Wall Street advising financial institutions on mergers and acquisitions, CNBC has learned.
Sources close to the firm say Thain has been interested in hiring Kraus as head of strategy and in recent weeks Kraus has been seen inside Merrill offices speaking with top officials.
Kraus left Goldman in early March as co-head of the firm's investment management arm after Goldman's Global Alpha fund nearly imploded. That said, he is considered one of the most knowledgeable people on Wall Street concerning financial institutions and has worked closely with Thain when he was at Goldman.
It's unclear where the talks are right now, but the discussions are another indication that Thain, since taking over for Merrill last year, is looking to model Merrill Lynch after Goldman, widely regarded as Wall Street's premier investment banking and trading franchises.
Thain recently hired another former Goldman executive, Guy Montag to run Merrill's global sales and trading, and sources close to the firm say he wants to bring in other Goldman executives as Merrill tries to rebound from one of the toughest years in its long history that included huge losses and writedowns of soured bonds on its books.
The move, however, is sure to stir controversy inside Merrill, which had one of the strongest corporate cultures on Wall Street and rarely elevated people to senior positions from outside the firm, particularly such a bitter rival as Goldman Sachs.
Goldman is widely despised inside many Wall Street firms for its sharp-elbowed tactics in snaring deals and trading stocks. Indeed, some people on Wall Street have speculated that the moves to bring in Montag and now possibly Kraus are yet another indication that Thain wants to purge another long-time Merrill executive, Greg Fleming from the senior management as co-president.
However, yesterday in an internal announcement Thain affirmed Fleming's role and title as part of his new organization structure that will change once again if Kraus is hired.
A Merrill spokeswoman had no comment; Kraus couldn't be immediately reached for comment.