Lie. Always lie. Tell a bigger lie. Play the victim. But never, ever admit any wrongdoing. That’s for suckers, pal.
It’s working for Lehman Brothers CEO Dick Fuld, the captain of the financial Titanic (the world’s largest bankruptcy) who didn’t exactly go down with the ship. He collected over $500 million in the 2000s for driving Lehman into bankruptcy, but he’ll tell you that he knew nothing about anything.
Incredibly, Dick Fuld is not in jail.
From Business Insider:
Looks Like Dick Fuld Lied Under Oath
Felix Salmon, Reuters | Apr. 29, 2010, 6:04 PM
Dick Fuld said under oath that he was paid less than $310 million from 2000 through 2007, and that he held, rather than sold, the “vast majority” of his shares, if not all of them. But it’s becoming increasingly clear that he was lying.
The latest bombshells come from former Lehman lawyer Oliver Budde, who spent many years drafting the bank’s compensation disclosures and hiding the restricted stock unit (RSU) component of Fuld’s pay.
Oh, please, like Dick Fuld is going to the slammer for that? Who hasn’t lied under oath to Congress?
The full story, on Bloomberg.com, is quite interesting:
Fuld Understated Pay More Than $200 Million, Lehman’s Budde Says
By James Sterngold
Fuld said he was a victim, not an architect, of the collapse, blaming a “crisis of confidence” in the markets for dooming his firm. Reckless management had nothing to do with it. “Lehman Brothers,” he said, “was a casualty.”
Fuld was the victim!
Fuld and Waxman went on to disagree about just how much money Fuld had taken out of Lehman before it went under, Bloomberg Businessweek reported in its May 3 edition. Fuld, now 64, said his total compensation from 2000 through 2007 was less than $310 million, not the $485 million that appeared on Waxman’s chart. He said 85 percent of his pay was in Lehman stock that had become worthless. “I never sold my shares,” Fuld said at one point. At another, he said he had not sold the “vast majority” of them.
Let’s start a collection! (I lost thousands because of Lehman’s deceptions, but no one gives a damn about me.)
Among those closely observing Fuld was a 49-year-old former Lehman lawyer named Oliver Budde who was watching the hearing at home on C-Span. Budde (pronounced Boo-da) was certain Waxman’s figures weren’t too high. They were too low, and he could prove it. Fuld, he believed, had understated the amount he was paid during those years by more than $200 million, and now he had done it under oath, for the entire world to see.
In “The Wages of Failure: Executive Compensation at Bear Stearns and Lehman, 2000-2008,” Harvard Law professor Lucian Bebchuk; Alma Cohen, a visiting professor from Tel Aviv University; and Holger Spamann, a Harvard Law lecturer, calculate that Fuld earned $522.7 million from 2000 to 2007, only slightly less than Budde’s tally.
The study found that Fuld earned $461.2 million of that total from the sale of 12.4 million shares of Lehman stock, more than the 10.8 million shares, including unvested RSUs, he owned at the time of Lehman’s bankruptcy.
But I thought that Fuld never sold anything and went down with the ship. Didn’t he say that under oath?
It appears that (1) the amount of Fuld’s compensation was hidden from shareholders like me, and (2) Fuld cashed out early.
From Fierce Finance:
Richard Fuld to face prosecution?
March 15, 2010 — 6:44pm ET | By Jim Kim
A simple and clear defense may be a tough call. Fuld has already seemingly adopted, via his spokesperson, the position that he simply did not know about those shocking “Repo 105” transactions, which recall to some the Enron era. The “ignorant CEO” defense has been tried before. But Fuld has given it a new twist, which might be called the Blackberry defense: A footnote in the report noted by the New York Times states that Fuld’s lawyer informed the examiner that he did not use a computer and only accessed e-mails on his Blackberry but could not open up attachments, including one that went into the Repo 105 deals in March 2008.”
So the explanations would be: He’s just incredibly detached by nature; he was deceived by other executives; the balance sheet was saved behind his back; he chose not to know to have a defense in the future. None of those are really going to fly.
The Blackberry defense! Sure you sent it to my Blackberry, but I never read it! Who can know how to open those attachments?
Fuld did not use a computer? Are you kiddin’ me? You pay a half a billion to your financial CEO, and he’s less savvy than grandma?
Dealbreaker had this to say about Dick Fuld’s recent testimony before Congress:
20 Apr 2010 at 5:40 PM
Does Dick Fuld Know How to Answer Questions?
By Zachery Kouwe
Asked if he should have known about the Repo 105 transactions, Fuld said “there was no reason why I would know about those sale transactions” because they were merely sales of government securities. “I was focused on less liquid assets: commercial real estate, residential mortgage, leveraged loans. I was focused on what could impact our capital. Government securities do not impact our capital.”
After a question about what caused the demise of Lehman Brothers, Fuld pauses for an uncomfortable amount of time and then begins a history lesson on Lehman, which goes back 150 years and leads up to to the firm’s IPO in 1994 before he’s cut off by Rep. Paul Kanjorski, who asks him to make his answer more succinct. But Fuld keeps fumbling and going back in time talking about how great the firm was. Kanjorski interjects again: “I haven’t heard you take responsibility” and “Don’t give me an advertisement” for the firm.
Congressman Kanjorski, you didn’t hear Dick Fuld take any personal responsibility? Personal responsibility is, like, so yesterday!
There’s a lesson here, kids. Always take the half a billion in cold, hard cash. It’s yours. You deserve it.
Deny, deny, deny.
Play the victim.
It’s an Obama world now.