"Ruthless isn't always that bad," Stan O'Neal used to tell associates, according to a 2004 profile.

Cutting jobs and costs and pushing his firm into new businesses, O'Neal certainly had a reputation for being ruthless in his five years as chief executive of Merrill Lynch. For a time, the results paid off. By last spring, Merrill's stock price had more than doubled under his reign, and the firm was regularly reporting strong profits.

Yet there is no monopoly on ruthlessness on Wall Street. O'Neal was forced out today by the board of Merrill Lynch after an embarrassing $8.4 billion write-down that caused the firm's first quarterly loss in six years.

Merrill Lynch has announced that O'Neal has retired from the company. A director, Alberto Cribiore, will serve as interim nonexecutive chairman and will lead a search committee to find the firm's next chief executive.

Cribiore is managing partner and founder of Brera Capital, a private equity firm, and former president of private equity firm Clayton, Dubilier & Rice.

Ahmass Fakahany and Gregory Fleming will continue as Merrill Lynch co-presidents and chief operating officers. 

Shares of Merrill Lynch were down nearly 3 percent in midmorning trading today. The stock rose sharply on Friday and Monday amid reports that O'Neal would be forced out.

O'Neal made two fatal missteps. First, the size of the write-down ballooned in two weeks from an estimated $5 billion, catching directors by surprise. And O'Neal, according to the New York Times, made a merger overture to a rival bank, Wachovia, without first telling directors.

His downfall took just days. Yet his ascent to the top was also remarkably fast.

He was born to a poor family in Alabama. When he was 12, his family moved to Atlanta, where his father, and a few years later, O'Neal himself, started working at a General Motors plant.

O'Neal was spotted as having management potential, and G.M. paid for him to earn an M.B.A. After working in finance positions at G.M. he joined Merrill in 1986.

O'Neal was a finance guy, and when he took the reins at Merrill after the tech bubble had burst, he was thought to be someone who would bring a more disciplined approach to a business known for its back-slapping brokers and cowboy traders and bankers.

As Daniel Gross writes in Slate, the assumption was that O'Neal (as well as the lawyer Charles Prince at Citigroup), "would be effective leaders for a new era of sobriety and careful management of risk. That era lasted for about 12 months."

Merrill ramped up in mortgages just as the housing market was cooling in order to be a bigger player in the lucrative, if risk-laden, business of securitizing mortgages.

Is one terrible quarter enough to justify canning the C.E.O.?

Douglas A. McIntyre in the 24/7 Wall St. blog suggests it may be somewhat unfair, saying: "O'Neal is gone even tough Merrill's five-year share performance is just as good as BSC [Bear Stearns] and much better than Citi, Bank of America, or Wachovia. He is an unsympathetic character, easy to fire, who did a better job for his shareholders than many of his peers."

Still, the third quarter was truly terrible, and Merrill has consistently underperformed the leader on Wall Street, Goldman Sachs—a fact that, the Wall Street Journal reports, made O'Neal furious.

The New York Times' DealBook blog points out that as Merrill's stock has slumped, Goldman's continues to climb. Today, Goldman's shares touched $241.32—their highest level since the former partnership went public in 1999.

Another element of the rivalry may have annoyed O'Neal: He and the chief executive of Goldman, Lloyd Blankfein, both own apartments in the same Park Avenue co-op, DealBook notes.
 
Also in Portfolio.com:

• The Front Runners for C.E.O.
• Who Is Alberto Cribiore?
• How the Media Helped Push Out O’Neal
• A Golden Handshake
• Who Might Buy Merrill?
• Wall Street Requiem