Accountability: Wall Street Edition

This is NOT what I would call taking responsibility for your mistakes:

Former Lehman Brothers Chief Executive Officer Richard Fuld is blaming the feds again, saying his defunct company only went bankrupt because it didn’t get adequate support from the Federal Reserve and Treasury officials.

In prepared remarks before the Financial Crisis Inquiry Commission Wednesday morning on Capitol Hill, Fuld, a key figure in the 2008 financial meltdown, planned to repeat statements he’s made before that blame the government, rather than Lehman's risky investments, for the company's failure.

“Lehman was forced into bankruptcy not because it neglected to act responsibly or seek solutions to the crisis, but because of a decision, based on flawed information, not to provide Lehman with the support given to each of its competitors and other nonfinancial firms in the ensuing days,” he plans to say.

“Had Lehman been granted that same access as its competitors, … Lehman would have had time for at least an orderly wind down or for an acquisition which would have alleviated the crisis that ensued.”

Fuld argues that the demise of the 158-year-old investment bank was out of its hands, caused by rumors that Lehman didn’t have the necessary capital to back its investments. He says the company was not alone in underestimating problems in the subprime mortgage market, pointing out that many government officials overseeing markets didn’t spot the crisis that was brewing.

Fuld also questions why Lehman was forced to file for bankruptcy when other companies, like Wachovia, were saved because they were deemed “too big to fail.”

Fuld is wrong to blame the government rather than himself and the others who ran the company into the ground with risky investment schemes and other kinds of jive.

He is right to wonder why it was Wachovia and others were deemed "Too Big To Fail" while Lehman was not, however.

Except that unlike Fuld, I don't think taxpayers should have been put on the hook for all the "Too Big To Fail" firms they bailed out.

Frankly they should have gone the way of Lehman Brothers and those running them should be in jail doing ten to twenty for fraud.

Which is also where Dick Fuld belongs.

Another Wall Street Crook (and Charter School Supporter)

That would be Dick Fuld, former Chief Crooked Officer at Lehman Brothers.

It is the Wall Street equivalent of a coroner’s report — a 2,200-page document that lays out, in new and startling detail, how Lehman Brothers used accounting sleight of hand to conceal the bad investments that led to its undoing.

The report, compiled by an examiner for the now-bankrupt bank, hit Wall Street with a thud late Thursday. The 158-year-old company, it concluded, died from multiple causes. Among them were bad mortgage holdings and, less directly, demands by two rivals, JPMorgan Chase and Citigroup, that the foundering bank post collateral against loans it desperately needed.

But the examiner, Anton R. Valukas, also for the first time laid out what the report characterized as “materially misleading” accounting gimmicks that Lehman used to mask the perilous state of its finances. The bank’s bankruptcy, the largest in American history, shook the financial world. Fears that other banks might topple in a cascade of failures eventually led Washington to arrange a sweeping rescue for the nation’s financial system.

According to the report, Lehman used what amounted to financial engineering to temporarily shuffle $50 billion off its books in the months before its collapse in September 2008 to conceal its dependence on leverage, or borrowed money. Senior Lehman executives, as well as the bank’s accountants at Ernst & Young, were aware of the moves, according to Mr. Valukas, a partner at the law firm Jenner & Block, who filed the report in connection with Lehman’s bankruptcy case.

Richard S. Fuld Jr., Lehman’s former chief executive, certified the misleading accounts, the report said.

“Unbeknownst to the investing public, rating agencies, government regulators, and Lehman’s board of directors, Lehman reverse engineered the firm’s net leverage ratio for public consumption,” Mr. Valukas wrote.

Mr. Fuld was “at least grossly negligent,” the report states. Henry M. Paulson Jr., who was then the Treasury secretary, warned Mr. Fuld that Lehman might fail unless it stabilized its finances or found a buyer.

Lehman executives engaged in what the report characterized as “actionable balance sheet manipulation,” in addition to “nonculpable errors of business judgment.”

The report draws no conclusions as to whether Lehman executives violated securities laws. But it does suggest that enough evidence exists for potential civil claims. Lehman executives are already plaintiffs in civil suits, but have not been charged with criminal wrongdoing.

Not yet, at any rate.

But hopefully Fuld and the rest will be taken to the cleaners in civil court.

Just the way taxpayers were taken to the cleaners by Lehman and Bear Stearns and the rest.

And of course Fuld is another one of those Wall Street hot shots who helps finance charter schools.

In his case, the Harlem Children's Zone

Or at least he did, before the collapse of Lehman.

Those were the days when he used to say things like "Look, I'm pissing thousand dollar bills these days. And I drink a lot of water. So I make a lot of piss. Whatever you need, you got."

Hank Greenberg of AIG also gave money to HCZ.

Ahh, American philanthropy - stolen money handed out to charter schools in order to subvert the "public" part of the public education system and help socialize children to become good, compliant, obedient corporate employees.

It's the American way.