The former head of proprietary trading at Morgan Stanley, who left amid a flight bankers and traders to hedge funds, is set to return to the investment banking fray with a top job at Bank of America Merrill Lynch. The hedge fund he has been running for Brevan Howard Asset Management for 18 months is being closed down.

The US bank said last night that Fabrizio Gallo will join in late summer as London-based co-head of global equities and Europe, Middle East and Africa global markets. He will report to Tom Montag, president of global banking and markets.