Merrill Liable in Sale of Bonds Backed by Executive Life WASHINGTON -- Merrill Lynch & Co. has been held liable for losses in bonds backed by Executive Life Insurance Co. that it sold in 1988 and 1989 to an Illinois bank. An arbitration panel of the Municipal Securities Rulemaking Board found that Merrill Lynch and one of its brokers, Robert Peele, were liable for $176,982 in losses suffered by the unnamed national bank. The bank purchased bonds from four of nine taxable issues backed by Executive Life guaranteed investment contracts in 1986, and damages were awarded on two of the transactions. Arbitrators concluded that Merrill and Mr. Peele told the bank that the bonds were insured either by Municipal Bond Investors Assurance Corp. or Financial Guaranty Insurance Co. when, in fact, they were not.