By Colin Barr
June 1, 2010

CIT chief John Thain’s putting the old gang back together.

CIT Group

, the small business lender that Thain (right) has been running since February, said Tuesday it hired longtime Thain sidekick Nelson Chai.

Chai, 44 years old, was the chief financial officer at both of Thain’s previous jobs: Merrill Lynch, the brokerage firm that Thain sold to Bank of America

 in the midst of the financial panic, and NYSE Euronext

.

At CIT, he will hold a different title — chief administrative officer — and play a loftier role. He will oversee the New York-based firm’s strategic planning, business development, and sales activities, and insurance and consumer finance units, CIT said.

“Nelson will play an instrumental role in the development of strategies that optimize CIT’s portfolio of businesses and further build upon our market-leading positions,” Thain said.

After BofA completed its purchase of Merrill on Jan. 1, 2009, Chai was named to head the combined bank’s Asia Pacific operations. But Thain was soon ousted over gaffes including big bonus payments and a lavish, shareholder-funded office redecoration, and Chai left weeks later.

Though Thain left Merrill looking somewhat tarnished, there are signs investors still believe in him as a turnaround artist. CIT shares have risen 21% since his hiring was made official in February, outstripping a 2% rise in the S&P 500 over the same period. CIT shares were up a dime at $36.89 in early trading Tuesday.

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