01/02/2009 05:12 am ET | Updated May 25, 2011

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.

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