(Vicky Ward, Vanity Fair, March 28, 2010)
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Senator Spencer Bacchus, the top Republican on the House Financial Services Committee, wrote that Lehman “used accounting gimmicks to hide its debt and mask its insolvency…More disturbing, the examiner’s report also describes what appear to be significant failings on the part of officials” at the SEC and the Federal Reserve Bank of New York. . . . The SEC and FED, after all, were inside Lehman Brothers for the last six months of its life. How did they miss all this? . . . Sen. Chris Dodd, the Senate banking chair has asked former Lehman chief Dick Fuld to return to testify exactly how Lehman misled so many people. . . . an email I received today from one of Lehman’s most senior employees — someone who worked there for 17 years. He wrote to me off the record so I am not at liberty to disclose his identity, but he was very senior and widely respected. . . . He is not the only Lehmanite to have responded to my new book, The Devil’s Casino (Wiley). Many have thanked me for exposing a culture led (and ruined) by a tiny leadership that was egregious, isolated and mendacious. Without exception, Lehman readers have told me I got it absolutely right — and — in particular they have agreed with today’s New York Post‘s article which noted that the book maintains that Lehman’s president Joe Gregory was actually the chief villain at the firm, responsible for much of the over-risky leverage, and not so much Dick Fuld. (Incidentally all the e-mailers and callers have agreed that their wives loathed being “married to Lehman” as the book points out in one chapter.) . . . So, here we have Lehman: ”An inner circle” at the top cut off from the rest. It fires people for telling the truth, and fails to promote the most competent executive until too late…. This culture didn’t spring up in its last few months…it festered for years. Whatever the SEC and FED missed in the bank’s final six months, the cabal at the top was already set in its ways and adept at hiding what it was really doing from not just the SEC, Fed and market — but its own senior management. That really is a horrifying culture, and one I am delighted to have exposed.