Friday 23 June 2017

Unrepentant Lehman ex-CEO says firm 'was not bankrupt'

Former Lehman Brothers Chairman and CEO Richard Fuld testifies before the Financial Crisis Inquiry Commission for a hearing about extraordinary government intervention and the recent financial crisis, on Capitol Hill in Washington, September 1, 2010. REUTERS/Jonathan Ernst
Former Lehman Brothers Chairman and CEO Richard Fuld testifies before the Financial Crisis Inquiry Commission for a hearing about extraordinary government intervention and the recent financial crisis, on Capitol Hill in Washington, September 1, 2010. REUTERS/Jonathan Ernst

Nearly seven years after Lehman Brothers filed for bankruptcy, triggering a financial panic around the globe, its former chief executive, Richard Fuld Jr, is still insisting it did not go broke.

"Lehman Brothers in 2008 was not a bankrupt company," Fuld said at a conference in Manhattan on Thursday, his first such public appearance since the financial crisis for which Lehman's massive Chapter 11 filing marked a tipping point.

During a speech that lasted a little more than 30 minutes, Fuld waxed nostalgic about the history of Lehman Brothers and his career on Wall Street, and ruminated about financial markets and current events.

But in his comments, Fuld was not humble or contrite. He blamed the financial crisis on a "perfect storm" and characterized Lehman's collapse as something that was largely outside of his control.

"Regardless of what you heard about Lehman's risk management, I had 27,000 risk managers at the firm because they all owned a piece of the firm," he said, referring to Lehman's employees at the time, who he said were all shareholders.

Lehman filed for the largest bankruptcy in U.S. history on September 15, 2008 after a harrowing weekend during which big-bank CEOs and senior government officials tried, but failed, to come up with a rescue plan.

Its collapse triggered a broader market panic that eventually led to a massive taxpayer bailout for Wall Street. Lehman's failure also set off years of litigation with creditors and counterparties, not to mention devastating losses for shareholders and employees.

Fuld has blamed his company's demise on factors ranging from short sellers to the federal government.

On Thursday he again defended his decision-making, saying it was based on the information he had at the time. He also suggested a lack of liquidity was the true culprit behind Lehman's demise: "You have to have enough liquidity to ride out the storm. Been there. Done that. No comment."

Fuld now runs a small company called Matrix Advisors, which he characterized as an old-line merchant banking firm. He spoke before a crowd of 1,300 who were attending a micro cap stock conference hosted by the accounting firm Marcum.

When asked in a Q&A following his speech why he had chosen to make his first appearance at the event, Fuld said it was time for him to move on from the past.

"Not a day goes by where I don't think about Lehman Brothers." he said. "I'd love to tell you I'm over it, it's behind me. Doesn't happen."

Reuters

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