AOL Money & Finance

Lehman lawyer says CEO not to blame

More

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.

Reader Comments (Page 1 of 1)

Symbol Lookup
IndexesChangePrice
DJIA-17.2410,433.71
NASDAQ-6.832,169.18
S&P 500-0.591,105.65

Last updated: November 24, 2009: 10:48 PM

BloggingStocks Exclusives

Hot Stocks

DailyFinance Headlines

Latest from BloggingBuyouts

TheFlyOnTheWall.com Headlines

BioHealth Investor Headlines

WalletPop Headlines

My Portfolios

Track your stocks here!

Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

BloggingStocks Partners

More from AOL Money & Finance

WalletPop Headlines