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May 28, 2015 6:40 pm
Unrepentant Dick Fuld blames Washington for Lehman collapse
Tom Braithwaite in New York
Former Lehman chief Dick Fuld arrives to speak at the Marcum Microcap conference in New York on Thursday
Dick Fuld, who presided over the implosion of Lehman Brothers, used his first voluntary public appearance since 2008 to blame Washington for fuelling the financial crisis and ordering the investment bank’s closure.
“Wow, I haven’t done this for a while,” Mr Fuld said. “This is my first public event since 08. I don’t include my wonderful time with Congress,” he added, referring to his post-crisis grillings on Capitol Hill.
Mr Fuld, who was known in his Wall Street heyday as the Gorilla because of his aggressive attitude, chose a relatively low-profile venue for his public comeback — the Marcum Microcap conference in New York where small companies were looking for investors.
But even there, almost seven years since the bank’s collapse, there was still ill-will towards the Lehman boss, particularly from employees — some of whom saw their life savings wiped out in the biggest bankruptcy in US history.
“I have a few words I’d like to say to him,” said Brian Choi, a former Lehman employee who is now vice-president at Woerner Holdings, an investment firm. “You screwed so many.”
Another in the audience remarked: “There should be a Plexiglas shield in front of him.”
Mr Fuld showed no sign of contrition over the demise of the bank, which he led from 1994. The crisis was “a perfect storm,” he said, “but it starts with the government.” It paved the way for unsuitable borrowers to buy homes, caused an interest rate shock, and then unfairly “mandated” the bankruptcy of Lehman while saving competitors.
He acknowledged that all investment banks “had too much leverage” but insisted that Lehman was still solvent when it was placed into bankruptcy, citing the bank’s $28bn of equity capital, a capital ratio of 11 per cent and unencumbered collateral of $127bn.
“Lehman Brothers . . . was not a bankrupt company. I think I missed the violence of the market and how it spread from one asset class to the next. Did we try to do everything we possibly could? Did we fall prey to some other agendas? I’ll leave it at that.
“There’s so much I’d love to say,” he said. “Dah dah dah dah dah . . . enough said on that.” He reached for a glass by the stage and took a sip. “No, this is not scotch or rum.”
In a somewhat disjointed speech, whose pop culture references spanned Dean Martin and Rocky, Mr Fuld pointed to Barack Obama’s administration and said: “We need new leadership.
“Everything’s ‘great’,” he added. “Why the hell does it not feel better? Why has the belly of America been ripped out?”
Mr Fuld said he was a “hardcore capitalist” but added: “Capitalism only works, though, if it starts at the top and filters down. If it doesn’t get down we’re going to lose, really simple.
“Enjoy the ride — no regrets,” he advised the audience. “Look in the mirror, ‘this is about you and me. Are we OK? Let’s enjoy the ride.’ ”
Though Mr Fuld had said he would not speak in detail about Lehman, he answered some questions about the bank’s failure from the conference moderator.
After being told there would be easy questions, at the start of the session, Mr Fuld adopted an exaggerated, deep, movie-announcer voice, replying: “There is no easy one.
“We don’t have time to hear all the things I would have done differently,” Mr Fuld said.
“Do we have time?” the moderator asked the audience. “Yes!” came the resounding reply.
The former Lehman chief said: “It’s very easy to look back. I must tell you that I was blessed with a terrific team, for the most part, a terrific team and we were in it together.”
Asked why he did not retire, Mr Fuld said: “I didn’t think I had a choice. Lehman went down. The next Monday I was working with Alvarez [& Marsal, the bankruptcy consultants working on stabilising the Lehman estate].”
Please understand, not a day goes by when I don’t think about Lehman Brothers. Not a day. I’d love to tell you I’m over it, it’s behind me. It doesn’t happen
- Dick Fuld
In the aftermath of the collapse, he worked with Bryan Marsal, the bankruptcy consultant who was appointed chief restructuring officer.
“I was dedicated to helping unwind some of this stuff. It got a little dark because he was dedicated to tearing down everything my team had built.
“You have the right to ask me what happened at the end then when the fabric of the team got frayed . . . All I can say to that was the survival instinct took over.”
Asked why he had chosen to appear now, Mr Fuld said: “I thought it was time. You know what. Time for me to raise my ugly head. Our business is growing. I think I’ve gotten a lot of this stuff behind me.”
In 2009 Mr Fuld founded Matrix Advisors, a mergers and acquisitions consulting firm based in midtown Manhattan.
“I said to all of you: enjoy the ride, no regrets. Please understand, not a day goes by when I don’t think about Lehman Brothers. Not a day. I’d love to tell you I’m over it; it’s behind me. It doesn’t happen. But having said that, I do have to move on and this is part of it.”
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/a6512800-055d-11e5-8612-00144feabdc0.html#ixzz3bXejuU4j
May 28, 2015 6:40 pm
Unrepentant Dick Fuld blames Washington for Lehman collapse
Tom Braithwaite in New York
Former Lehman chief Dick Fuld arrives to speak at the Marcum Microcap conference in New York on Thursday
Dick Fuld, who presided over the implosion of Lehman Brothers, used his first voluntary public appearance since 2008 to blame Washington for fuelling the financial crisis and ordering the investment bank’s closure.
“Wow, I haven’t done this for a while,” Mr Fuld said. “This is my first public event since 08. I don’t include my wonderful time with Congress,” he added, referring to his post-crisis grillings on Capitol Hill.
Mr Fuld, who was known in his Wall Street heyday as the Gorilla because of his aggressive attitude, chose a relatively low-profile venue for his public comeback — the Marcum Microcap conference in New York where small companies were looking for investors.
But even there, almost seven years since the bank’s collapse, there was still ill-will towards the Lehman boss, particularly from employees — some of whom saw their life savings wiped out in the biggest bankruptcy in US history.
“I have a few words I’d like to say to him,” said Brian Choi, a former Lehman employee who is now vice-president at Woerner Holdings, an investment firm. “You screwed so many.”
Another in the audience remarked: “There should be a Plexiglas shield in front of him.”
Mr Fuld showed no sign of contrition over the demise of the bank, which he led from 1994. The crisis was “a perfect storm,” he said, “but it starts with the government.” It paved the way for unsuitable borrowers to buy homes, caused an interest rate shock, and then unfairly “mandated” the bankruptcy of Lehman while saving competitors.
He acknowledged that all investment banks “had too much leverage” but insisted that Lehman was still solvent when it was placed into bankruptcy, citing the bank’s $28bn of equity capital, a capital ratio of 11 per cent and unencumbered collateral of $127bn.
“Lehman Brothers . . . was not a bankrupt company. I think I missed the violence of the market and how it spread from one asset class to the next. Did we try to do everything we possibly could? Did we fall prey to some other agendas? I’ll leave it at that.
“There’s so much I’d love to say,” he said. “Dah dah dah dah dah . . . enough said on that.” He reached for a glass by the stage and took a sip. “No, this is not scotch or rum.”
In a somewhat disjointed speech, whose pop culture references spanned Dean Martin and Rocky, Mr Fuld pointed to Barack Obama’s administration and said: “We need new leadership.
“Everything’s ‘great’,” he added. “Why the hell does it not feel better? Why has the belly of America been ripped out?”
Mr Fuld said he was a “hardcore capitalist” but added: “Capitalism only works, though, if it starts at the top and filters down. If it doesn’t get down we’re going to lose, really simple.
“Enjoy the ride — no regrets,” he advised the audience. “Look in the mirror, ‘this is about you and me. Are we OK? Let’s enjoy the ride.’ ”
Though Mr Fuld had said he would not speak in detail about Lehman, he answered some questions about the bank’s failure from the conference moderator.
After being told there would be easy questions, at the start of the session, Mr Fuld adopted an exaggerated, deep, movie-announcer voice, replying: “There is no easy one.
“We don’t have time to hear all the things I would have done differently,” Mr Fuld said.
“Do we have time?” the moderator asked the audience. “Yes!” came the resounding reply.
The former Lehman chief said: “It’s very easy to look back. I must tell you that I was blessed with a terrific team, for the most part, a terrific team and we were in it together.”
Asked why he did not retire, Mr Fuld said: “I didn’t think I had a choice. Lehman went down. The next Monday I was working with Alvarez [& Marsal, the bankruptcy consultants working on stabilising the Lehman estate].”
Please understand, not a day goes by when I don’t think about Lehman Brothers. Not a day. I’d love to tell you I’m over it, it’s behind me. It doesn’t happen
- Dick Fuld
In the aftermath of the collapse, he worked with Bryan Marsal, the bankruptcy consultant who was appointed chief restructuring officer.
“I was dedicated to helping unwind some of this stuff. It got a little dark because he was dedicated to tearing down everything my team had built.
“You have the right to ask me what happened at the end then when the fabric of the team got frayed . . . All I can say to that was the survival instinct took over.”
Asked why he had chosen to appear now, Mr Fuld said: “I thought it was time. You know what. Time for me to raise my ugly head. Our business is growing. I think I’ve gotten a lot of this stuff behind me.”
In 2009 Mr Fuld founded Matrix Advisors, a mergers and acquisitions consulting firm based in midtown Manhattan.
“I said to all of you: enjoy the ride, no regrets. Please understand, not a day goes by when I don’t think about Lehman Brothers. Not a day. I’d love to tell you I’m over it; it’s behind me. It doesn’t happen. But having said that, I do have to move on and this is part of it.”
