Stan O’Neal looks poised to make a reappearance on Wall Street, a little over a year after he was ousted as chairman and chief executive of Merrill Lynch for leading the investment bank to record losses.

Vision Capital Advisors said yesterday that it was in talks with Mr O’Neal for a role at the New York-based hedge fund manager but declined to give additional detail on the nature of the role.

Vision Capital has $840 million (£559 billion) under management and specialises in investing in small and mid-cap companies. The fund manager, set up by bond trader Adam Benowitz and Randolph Cohen, a finance professor at Harvard Business School three years ago, has been in talks with Mr O’Neal for at least two months.

Mr O’Neal left Merrill Lynch in October 2007, having overseen the strategy that led the bank to report a third-quarter loss of $2.2 billion. Under Mr O’Neal’s leadership, Merrill Lynch became one of the biggest underwriters of mortgage-backed securities on Wall Street, which led to the huge losses.

He was later accused of playing golf while the bank, whose staff were once known as the thundering herd because of their aggressive business style, struggled to survive. The executive further infuriated investors and employees by negotiating an estimated $160 million severance package.

Last Friday, Merrill Lynch’s shareholders voted for a $19.7 billion rescue takeover by Bank of America. Winthrop Smith Jr, a son of one of the bank’s founders and a long-time Merrill employee, used the shareholder meeting to criticise Mr O’Neal and the board that oversaw his decisions.

“Shame on them for allowing him to overleverage the firm and fill the balance sheet with toxic waste to create short-term earnings,” Mr Smith said. “Shame on them for not resigning themselves.”

He added: “Today is not the result of the sub-prime mess.”

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