The lead attorney representing Lehman Bros. in the bankruptcy process is now making the case the former CEO Richard Fuld is not at all responsible for the collapse of the company he was leading.In response to a motion by Thomas DiNapoli, New York State Comptroller, to have a trustee appointed to oversee Lehman's unwinding, Harvey Miller wrote that DiNapoli "blithely ignores that under the long term leadership of Mr. Fuld, Lehman had become one of the premier independent investment banking concerns in the world and had steadily provided significant returns to its investors, employees and shareholders."
In other words, Fuld deserves credit -- and hundreds of millions of dollars -- for the company's good times but does not deserve a single morsel of blame for its fantastic descent into bankruptcy. Doesn't that seem a little bit self-serving?
Fortune contributor William Cohan -- who is also the author of the excellent history of Lazard Freres, The Last Tycoons -- dissects this argument in a column and explains why it's wrong: Over the course of his career at Lehman, Fuld made a series of decisions that moved Lehman out of the advisory business and into the glorified hedge fund that it became. In short, Lehman Bros. was growing rapidly by taking huge risks with its own capital -- not at all the traditional model of investment banking. It was those risks that led to the company's failure and as chairman and CEO during the time when the company's business model shifted, Fuld deserves a huge amount of the blame.
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Reader Comments (Page 1 of 1)
2-03-2009 @ 1:17PM
BHarrison said...
So, the CEO who was literally paid HUNDREDS of MILLIONS of dollars is denying responsibility for the managment of the corporation that he was paid so exorbitantly to handle? Corporations are like "ships at sea" . . . the captains and the CEOs are FULLY, 100% responsible for what happens under their "managmement" . . . THAT IS what they get paid all of their money for doing, isn't it?
Therre is the old saying that "one cannot be held responsible for anything that one doesn't have the authority to change", right? However, the converse is true also. If one has the ultimate authority to manage, and is paid enormous sums to manage a business enterprise, then they cannot evade responsibility for whatever happens with the company operations, right? TheCEOs are FULLY, 100% responsible for the orchestration and perpetuation of the pyramid and Ponzi schemes, the "derivative" frauds, and other frauds that arise under their management, esp. in the magnitutde of the FRAUDS and losses that have been incurred. The CEOs want the financial REWARDS without any of the legal responsibilities for the managment of the corporations. This defies "common sense"; these CEOs needto be fired, then indicted and prosecuted for the FRAUDS that they orchestrated and oversaw.
2-20-2009 @ 1:10AM
staggermekc said...
Send them to Gitmo! Wall St and Co. along w/ corp greed and selling off our country to China and Opec has done more hurt and sorrow and suffering than -9/11 !!
They are Econterrorist who used short term, short sell, speculative bowl movementsd for their golden exits- I would love to have them in a cell and get golden showers - cant wait for the XXXtube vid of Maddof bent over being Bubba's bitch and more...but I am sure he'll be taken out before then....everyone light a candle for this.