naked capitalism

I had wondered whether former Lehman CEO was more than a tad unbalanced. Anyone who can tell a business peer, as he reportedly did to John Thain, that he would reach down the throat and tear out the heart of those who might be disparaging Lehman, at a minimum is wanting in propriety and decorum. Veiled threats are generally as effective than overt ones and are less likely to lead to future embarrassment.

The latest bit of news, that Fuld plans to re-enter the financial business post-haste, confirm my jaundiced views about his contact with reality.

Although Fuld could be generous, he showed a predilection to bullying, particularly within Lehman, and had can-do types around him who functioned as enablers (it is unclear whether they were caught up in Fuld’s reality distortion or simply and correctly hesitated to cross him).

But Fuld is so unwilling to recognize that he failed Lehman in refusing the terms of some of the late-stage capital raising options that he assumes he can move on immediately to a new gig, without spending any time or effort on rehabilitating his image. Only someone with more than a touch of narcissism could think he could come back so quickly. Even though Mike Milken was a convicted felon, he has a large number of fans who thought he was unfairly targeted by prosecutor Rudy Guilani. Even so, Milken has devoted a great deal of time and energy to charitable activiites to improve his image.

John Gutfreund, who merely made one colossal error of judgment (waiting five weeks before calling the Fed about a trader who cheated on Treasury auctions) has never come close to restoring his former image. Charles Sanford, once celebrated head of Bankers’ Trust, seems to have disappeared from view entirely. I doubt that Marcel Ospel, who turned Swiss Bank, then UBS, from a private bank and plodding international lender, into one of the swashbuckling leaders of global investment banking before driving it off the cliff, thinks that he can quickly return to the financial stage.

From the Financial Times:

Dick Fuld, the former chief executive of Lehman Brothers, is planning a comeback and has told friends he might launch a small advisory firm to harness his contacts in US companies once the dust settles on Lehman’s bankruptcy.

People close to the situation said Mr Fuld’s plans were neither firm nor immediate because the legal and political fall-out from Lehman had still to play out.

In October, Mr Fuld and other Lehman executives received subpoenas relating to federal investigations into whether managers misled the public about the bank’s financial condition before its collapse in September.

Mr Fuld, 62, who ruled Lehman with an iron fist for 15 years, has told former colleagues and clients that he has no intention of retiring. He has argued that his long experience of Wall Street and the corporate world can still be valuable to companies and chief executives.

People close to the situation said one of the options Mr Fuld is considering is the launch of a small advisory boutique to help companies with strategic and financial issues.

Some Wall Street figures doubt whether Mr Fuld would be able to persuade chief executives to hire him for advice after he was sharply criticised by politicians and investors for his stewardship of Lehman