Dick Fuld: Criminal Charges In The Offing?

The blockbuster article in New York magazine made it clear that Dick Fuld was telling investors and creditors one thing about the health of Lehman Brothers while the company's internal books were telling executives another. So will Fuld find himself on the business end of a federal indictment? Should he?

If the past, especially the collapse of Enron, is prelude, Fuld should probably be preparing to defend himself against criminal charges. Federal prosecutors tend to suspect that dramatic business failures result mostly from criminal actions rather than poor business decisions. They have a powerful arsenal of federal law and know almost no bounds to the creative use to which they can be put. All the incentives will agitate toward prosecutiion. Putting Fuld, who is one of the least appealing executives in recent history, into jail would be a career making move for a federal prosecutor.

Read the whole story here.

Comments

[LALC]

Indict - absolutely (all of 'em)! This guy was not so stupid that he didn't have a clue! This is WAY, WAY worse than Enron ever was.

BTW, he apparantly has to sell his $20 million dollar art collection. My husband said we should send him an Elvis on velvet!

[vippy]

Why only Lehman, why not Goldman Sachs or AIG??? And please, don't offer huge salaries and
bonuses in the future. Lose those 'good' people and see where they might go, to Japan LOL?

[RJII]

unethical greed at the expense of investors and the general public.
I'd like to shake the hand of the guy who sh oc ked him one recently.
I hope they take his palace and greedy savings.

[navy62802]

I agree with prosecuting these guys. I think they should be thrown under the jail. However, pursuing Fuld alone seems to me like a personal vendetta for Hank Paulson, who has been known to be on bad terms with Fuld. It would just simply stink to high heaven if this guy is the only one to go down because of his actions.

[OtayPanky]

An aggressive investigation is a good idea. It will determine whether or not Fuld was deliberately hiding the firm's problems as a publicly traded company, which is a criminal offense - or whether the collapse of Lehman was merely an "act of god" from an economic tsunami.

We need such vigorous investigation in order to put the fear of retribution into the hearts of all the playas. Otherwise, they just naturally give into the base human appetite for making money by fleecing the rest of us.

[planetjeffy]

Time to prosecute all that committed fraud in this real estate pyramid scheme. From crooked mortgage brokers to bank presidents, they were all selling worthless paper and they knew it.

[pointyheadprodigy]

This sounds well and good, but shouldn't Bush go first?Then Cheney, then Rumsfeld, then Rice, etc. Fuld will get his turn.

[CaptainHowdy]

They ALL need to go to jail. Every last one of them.

[Justinpassing]

A Stock Market that goes up because of contributions, is not a stock market, it's a goddamn charity.

[Sundialsvc4]

It's well-and-good that we might decide to pursue criminal charges against yet-another bank executive ...

... but we cannot avoid the necessity of pursuing similar charges against "any civil officer."

Unfortunately for all of us, these people did not work in a vacuum. In fact, they worked well-within a system of "loose" (or utterly non-existent) regulation that was put upon them by a great many "civil officers" ... a great, great many indeed.

They told us that we had unlimited money ... that "a promise to pay money" was, in fact, "money" that could be bought and sold and multiplied. We failed to notice that they also had a fondness for shamrocks . . .

But ... it's crime. Private crime, and public crime. Low crime, and high crime. Unless 300 million of us are somehow content to "live with crime" (clue 'ya: we're not...), it's time to prosecute. And guess what: that means that impeachment, of any "civil officer," is NOT "off the table."

[000Jade000]

They should all be indicted for risking the security of everyone across the globe.

Look here to see who has the most exposure to bad derivatives:

http://georgewashington2.blogspot.com/2008/10/whos-got-biggest-derivatives-exposure.html

Lehman triggered this collapse with their failure. They were "only" exposed to $7 trillion in derivatives!!

So imagine what will happen if any other institution on that list fails!!

#1 is JPMorgan (hence their rush to buy up the other bad banks...they had to do it to stop the bleeding)
#2 is Bank of America
#3 is Citi

(JPMorgan has announced it will lay off 9,200 Washington Mutual workers.)

We should be very concerned about what is going on with Citi right now. They are "too big to fail," because their failure will take down the entire economy. As will the failure of any of the banks on that list. (They all gambled against eachother.)

The big banks are hoarding cash to try to pay off their derivatives liabilities. That's where all of the bailout money is going.

[Sundialsvc4]

It's morning. The leprechaun is gone. The "gold" is what it always was... smelly straw.

It's a tulip-bulb. Nothing more. And it don't look like it's in any condition to produce even so much as "a new tulip."

We've been hoodwinked. Swindled. Robbed. And for every high-banker that was in some way responsible, there are dozens of high-criminals in various forms of public office who are right now hopin' and prayin' that "impeachment is still off the table."

Nope. It's not. "You do the crime, you do the time." Because there are 300 million of us "we the peoples" out here who really don't like thieves. Looks like there's only a couple thousand of you. Guess what... you're outnumbered.

[ObjectiveRealist]

W00t!

[truthynesslover]

heck of a job!

[darthdarcy]

If they prosecute Fuld they'll have a hard time not prosecuting the whole lot of them...

With Eric Holder as AG that is extremely unlikely, he'd rather give the poor 5 years mandatory sentence for simple possession of marijuana..!

Go figure..

[aweissnet]

So many criminals, so little time ....

Better get started!

[duze]

Treat a criminal like a criminal, this is not the time for favoritism. If a POOR man stole anything there would be a consequence. Why should these guys be different.
No fancey cushy spa type prison. A real prison,. Then read those letters home.
This must be real consequences or it will never stop!

[duze]

So what prosecute, everything and everybody.

[plwood01]

Guantanamo is the place they all need to be in and it would not cost us as much as building something. The plus is that we would not have to even look at these folks again since Gitmo is in Cuba. We could then rebuild our relationship with Cubans who would be glad to have the autos still sitting on the lots here! They won't be able to get rid of them here, so they need to make Christmas bright for us Americans, a stimulus check and a new car in every driveway! Now that is a Chritmas I have been dreaming of!

[Samalabear]

Now this is a great idea.

[bayviking]

Critical conditions for every bailout, fire top management and their board first, then provide bailouts which make sense for preserving our balance of trade, then prosecute for fraud.

[Sundialsvc4]

Stand by the depositor's actual demand-deposits up to $100,000 as you promised to do. Not one drop more. Payments only to the original depositors, only in gold coin. Not a drop to the banks. No "bailouts" paid to bank-management. No attempt to prop them up as going concerns. If they have somehow forgotten what "the boring business of banking" really is...let them re-discover it.

[joebaggadonuts]

Fuld has a target already painted on his back. Go after someone who counts. AIG execs or Citi execs... the list of people who still have influence to lose is fairly long, but I think we would believe Justice is really for the people if those were the guys that were targeted instead of someone who already lost.