azon.co.uk
“I WAKE up every single night thinking, ‘What could I have done differently? What could I have said? What should I have done.’ And I have searched myself every single night. And I come back to this: at the time I made those decisions, I made those decisions with the information that I had. I can look right at you and say, this is a pain that will stay with me for the rest of my life…”
When Dick Fuld delivered these words to Congress, he was loudly berated for being insufficiently sorry for his role in the demise of Lehman Brothers—America’s biggest bankruptcy—in September 2008, a bankruptcy that triggered the near collapse of the global financial system. Yet Vicky Ward’s history of the last 25 years of the Wall Street investment bank, the final 15 under Mr Fuld’s watch, broadly supports the former chief executive’s assessment of himself. It offers no evidence of the alleged wrongdoing for which many people want to see him in court.
Indeed, writes Ms Ward, a contributor to Vanity Fair magazine, “despite appearances and the endlessly self-perpetuated myth of being a mighty gorilla, Dick Fuld was never truly synonymous with Lehman.” Instead of the domineering king of the Lehman jungle, Mr Fuld was in reality merely a “lieutenant” to two more powerful leaders of the firm who technically served under him, Chris Pettit and then Joe Gregory. Well, maybe.
Ms Ward’s account is engaging enough, though it suffers from the fact that both Mr Fuld and Mr Gregory refused to co-operate with her. She reveals little that is new about either man. Mr Fuld liked his staff, especially his executives, to be married and faithful and clothed in a suit and tie. He is flattered when his new chief of staff, after seeing a wildlife film, addresses him as Ntwadumela, Tswana for “He who greets with fire.” Mr Fuld insists his executives take their wives hiking during an annual retreat at his home in Sun Valley, which provides the basis for an entertaining chapter entitled “Lehman’s Desperate Housewives”, though to be fair the complaints about husbands being slaves to their company could have been heard just as loudly at any other Wall Street firm.
Mr Gregory, president of Lehman until he was ousted just before the end, should have been focused on the firm’s ballooning balance-sheet. Instead he allowed himself to be distracted by a crusade to turn Lehman into a model of political correctness. Mr Gregory championed a gay, lesbian, bisexual and transgender network at the firm and hired 30 executives to run inclusion and diversity programmes. He was quickly nicknamed “the Oprah Winfrey of Wall Street”.
The reader learns that Pettit, who died in an accident in 1997, is regarded by some as a saintly figure who embodied Lehman’s legendary “One Firm” philosophy that later crumbled under Messrs Fuld and Gregory. Ms Ward received so much help from his family and friends that it unbalances her book. She even interviews Pettit himself, through a psychic, eliciting the scoop that Mr Gregory “deceived” and Mr Fuld “covers his tracks better”.
She provides a moving account of Lehman’s recovery from the September 11th 2001 attacks; it occupied three floors of the North Tower. How much did this survival, following an earlier escape from disaster at the hands of the failed hedge fund, Long-Term Capital Management, fuel Lehman’s sense of invulnerability, that persisted until the stroke of midnight?
Few readers will have the energy to take in more than one or two books on the financial crisis. The last days of Lehman have been described more comprehensively by Andrew Ross Sorkin in “Too Big To Fail” and with greater insider perspective and passion by Larry McDonald and Patrick Robinson in “A Colossal Failure of Common Sense”. As the death throes begin, Ms Ward paints Mr Fuld as increasingly out of touch, uninformed and unable to see how bad things had become: a gorilla in the mist, as it were. For that, at least, his defence team should be grateful.