Dick Fuld: ‘Lehman was not a bankrupt company’
When it comes to the financial crisis, the gorilla still seems to be in the mist.
Dick Fuld, the former CEO of Lehman Brothers, whose large forehead and demeanor has led people over the years to compare him to a primate, has ticked off a number of reasons for the banking disaster that led to the Great Recession, among them include the government, reckless borrowers, aggressive investors and poor regulation. Curiously missing from Fuld’s financial crisis blame game: His own firm.
In fact, on Thursday, Fuld sought to refute the notion that his firm was in trouble in late 2008. He said the company had $28 billion in assets, and $127 billion in available capital. “Lehman was not a bankrupt company,” he said.
Fuld defended his former firm at an investment conference on Thursday in midtown Manhattan. It was Fuld’s first public comments since he testified in front of Congress shortly after Lehman failed. Fuld said he hadn’t come to talk about Lehman, but he clearly still seems upset his firm had failed and harbors plenty of regrets. At times during his talk he seemed to be in pain, taking deep breaths before discussing Lehman.
“You don’t have the time to hear all the things I would do differently,” said Fuld. The former top banker admitted he made a number of mistakes as the head of Lehman, from decisions about the people he picked to run the firm to “the government’s role, or what I thought it was.”
Fuld didn’t elaborate, but the comment seemed like a jab at Erin Callan, the former Lehman CFO, who many people have said wasn’t up to the job. Fuld fired Callan and Lehman COO Joseph Gregory a few months before the firm went under. (Read Fortune’s The Fall of a Highflier for more.) Some have said that Fuld was surprised that the government didn’t bail Lehman out in the end.
Fuld said he did everything he could to save the bank, but that Lehman “fell prey to others’ agendas,” and “a perfect storm.” Nonetheless, Fuld said he was proud of the culture he built at Lehman. He said the firm has been criticized for poor risk management but that every one of Lehman’s 27,000 employees was in risk management, a comment that got jeers on Twitter.
Fuld’s speech was the lunchtime keynote address at the Marcum Microcap Conference. A speaker from Marcum said that Fuld had donated his speaking fees for the event to the Harlem Children’s Zone, an educational non-profit. At the end of his speech, a representative from the non-profit came on stage to accept a giant check for $25,000. The amount seemed modest for speakers fees these days. In accepting the check, the representative from the Harlem Children’s Zone said that her organization believes everyone deserves second chances.
In 2009, Fuld launched a new firm, Matrix Advisors, that is focused on raising money for small companies. Not all of those investments have gone well. In 2011, according to Fox News, Matrix helped raise money for an insurance company In the Car, which claimed to be worth as much as $20 million. The company is now worthless.
Fuld said his new firm works like a merchant bank, except it doesn’t directly invest its own capital into the businesses it represents. “I’ve already lost enough of my own capital,” Fuld said.