As I am sitting here working on other things, I have CNN on with the Congressional testimony of Richard Fuld, the CEO of bankrupt Lehman Brothers CEO — the man who was at the helm when yet another house of economic cards came crashing down on us.
Lehman shareholders and employees have been left holding the bag, but Fuld’s bag held almost $500 million dollars from his career at Lehman, including a $22 million dollar bonus in March.
When asked about how things could have gone so wrong for Lehman, Fuld said:
“No one realized the extent and magnitude of these problems, nor how the deterioration of mortgage-backed assets would infect other types of assets and threaten our entire system. With the benefit of hindsight, I can now say that I and many others were wrong.”
After I picked my jaw up off the floor, I remembered that this is exactly the sort of testimony we heard from the Enron guys — before the government spent years prosecuting them and finding out the real truth of their role in ruining not only a corporation, but also the financial lives of many.
Not surprisingly, the Wall Street Journal is reporting that the FBI has launched an investigation into whether Lehman fraudulently misled investors about the firm’s finances.
Fuld is looking mighty uncomfortable up there in front of all those Congressmen. Oh, and the Lehman compensation committee who OK’d his salary? Fuld was involved in appointing the members. Think maybe Fuld could chip in a few bucks toward that $700 billion bail-out?
P.S., Hat-tip to Outside the Margin for tweeting me about the related 60 Minutes piece on the bail-out last night. Off to watch it now!
October 6th, 2008 at 1:20 pm
Isn’t that “Fuld”, not “Fund”?
Half of me thinks that, yeah, they’re all a bunch of fools and incompetents who thought you could keep borrowing money to buy gambling stocks to borrow money to buy gambling stocks to…
…and that it would never, ever end! Woohoo! Prosperity forever!
There was a NYTimes piece about some 2004/2005 stuff going on at the SEC that allowed these institutions to "self-regulate"…did you see that piece? Made me think of you! http://www.nytimes.com/2008/10/03/business/03sec.html?_r=4&hp=&pagewanted=all&oref=slogin&oref=slogin
October 6th, 2008 at 1:25 pm
omegamom, thanks for catching the mistake. They actually had his name up as “Fund” on CNN, and I didn’t double check. My bad.
I did see that NYTimes piece … I just kept saying, I said so!” as I was reading the piece!
October 6th, 2008 at 4:54 pm
Well, we never learn. Not from Enron, not from Fannie, Freddie, and certainly we won’t have learned from the bailout fiasco.
The fox is watching the hen house, and he’s not giving up his post.
October 7th, 2008 at 9:33 am
Jeffrey Skilling is fluffing the pillow in the next bunk.
http://www.WilyTrax.com