NY Magazine Cover Story: Dick Fuld -- villain or industry sacrificial lamb?

Dick Fuld got the NY Magazine cover this week. "Is Lehman CEO Dick Fuld the true villain in the collapse of Wall Street, or is he being sacrificed for the sins of his peers?" It's a long article, and we're still reading it....

...A few weeks after the bankruptcy, Congress summoned him to Washington for a deeply humiliating inquisition. “You’re the villain today,” one congressman told him. For Congress, he was little better than a looter, pocketing millions as his company collapsed—$480 million over half a dozen years, another congressman charged. If that wasn’t enough pain, three sets of prosecutors launched investigations of Fuld and Lehman, probing whether shareholders had been duped.

But Fuld is also, in some sense, a victim. He’d held on to 10 million shares of Lehman stock until the end and lost almost $1 billion—“He drank the Kool-Aid,” said one executive. And consensus grows that the Lehman fall was one of Treasury Secretary Henry Paulson’s and Fed chairman Ben Bernanke’s biggest mistakes, amplifying the crisis exponentially......

Fuld understands the political usefulness of Lehman’s collapse. The resentful public got to witness the devastating consequences of a financial failure. Four days after Lehman’s collapse, the government had to bolster the money markets, once the most secure of investments. Two weeks later, a frightened Congress handed Paulson $700 billion, part of which he quickly doled out to the country’s largest investment banks at advantageous interest rates. If only he’d had that money before, he might have been able to save Lehman, Paulson told interviewers. To those close to Fuld, Paulson was simply covering his ass, doctoring the story post facto. “They could have found a way to save Lehman,” says a person involved with both the Bear Stearns rescue and the Lehman failure.

But perhaps the worst part for Fuld is that so many of the troops now revile him. He’d been the leader around whom they rallied, the one who’d saved them time and again. Now they believed that through pride or obstinacy Fuld had screwed their futures. For Fuld, it was agonizing. He couldn’t speak out. His lawyers kept him cordoned him off......

Burning Down His House - NY Magazine

Comments

[Max]

Villain.