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.