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Lehman brothers’ former CEO makes first public statement
Dick Fuld, CEO of Lehman Brothers at the time of its collapse – the largest bankruptcy in US history – disavowed that responsibility for the investment bank’s demise lay with its own culture of operations in his first public speech since 2008.
Speaking at the Marcum MicroCap Conference in New York, Fuld said that the crash’s origins stemmed instead from government policies that pushed for non-qualified home ownership and the aggressive action of hedge funds who short-sold the company’s stock, believing that it was vulnerable to a decline in value.
Dick Fuld, who joined Lehman Brothers in 1969 and became chairman and CEO in 1994, also defended his former employees, arguing that their motives were clear in view of the fact that, collectively, they owned 30% of the bank’s stock:
“Regardless of what you heard of Lehman Brothers’ risk management, I had 27,000 risk managers because they all owned a piece of the firm,” Fuld said.
In the wake of the investment bank’s collapse, Dick Fuld was forced to appear before the United States Congress, where the size of his compensation package – estimated at around US$485m in salary, bonuses and options between 2000 and 2007 – was scrutinized during an interrogation to determine whether Fuld was guilty of oversights. Ultimately, Fuld was never prosecuted and - both then and now – declared that the collapse was something that weighed heavily on his mind.
“Not a day goes by that I don't think about Lehman Brothers,” Fuld said yesterday.
Fuld attended the event to discuss his present venture, Matrix Advisors, a small advisory firm said to focus on merchant banking and which was launched less than a year after the collapse of Lehman Brothers. Towards the end of last year, Fuld and representatives of Suzhou Kaida Venture Capital were in Beijing to speak of their intention to secure passage for Chinese firms to make initial public offerings in the US.
“I thought it was time for me to raise my ugly head. Our business is growing. We're building companies,” he said of Matrix Advisors.
US urban areas see uneven recovery
The economic recovery in the US is one of fragmentation, according to a new study of 100 urban areas within the country.
The Brookings thinktank found that almost half of 100 major urban (or metropolitan) areas analyzed in the US were yet to recover jobs lost during the Great Recession. Meanwhile, a third of US urban areas were still to return to the level of output seen before financial uncertainty set in.
“This may be the norm now — extreme variation,” said Mark Muro, policy director for the Metropolitan Policy Program at the Brookings Institution, in a report for the Financial Times.
The study also reveals the uneven experiences of different urban areas. While cities such as Austin, Texas, San Francisco, and Raleigh, North Carolina have recovered impressively to surpass previous peaks by dint of their focus on technology and/or bioscience, for instance, other locales have not been so fortunate, such as Florida or inland California.
In terms of employment growth, Austin topped the US’s urban areas with a 16% increase on its pre-crisis level. The Texan state capital also led the way for an increase approaching 30% on its pre-crisis output growth, along with that state’s most populous city, Houston.
Tim is a writer with a background in consumer journalism and charity communications. He trained as a journalist in the UK and holds degrees in history (BA) and Latin American studies (MA).
Business News Weekly Roundup: May 29 2015
By Tim Dhoul
Updated UpdatedLehman brothers’ former CEO makes first public statement
Dick Fuld, CEO of Lehman Brothers at the time of its collapse – the largest bankruptcy in US history – disavowed that responsibility for the investment bank’s demise lay with its own culture of operations in his first public speech since 2008.
Speaking at the Marcum MicroCap Conference in New York, Fuld said that the crash’s origins stemmed instead from government policies that pushed for non-qualified home ownership and the aggressive action of hedge funds who short-sold the company’s stock, believing that it was vulnerable to a decline in value.
Dick Fuld, who joined Lehman Brothers in 1969 and became chairman and CEO in 1994, also defended his former employees, arguing that their motives were clear in view of the fact that, collectively, they owned 30% of the bank’s stock:
“Regardless of what you heard of Lehman Brothers’ risk management, I had 27,000 risk managers because they all owned a piece of the firm,” Fuld said.
In the wake of the investment bank’s collapse, Dick Fuld was forced to appear before the United States Congress, where the size of his compensation package – estimated at around US$485m in salary, bonuses and options between 2000 and 2007 – was scrutinized during an interrogation to determine whether Fuld was guilty of oversights. Ultimately, Fuld was never prosecuted and - both then and now – declared that the collapse was something that weighed heavily on his mind.
“Not a day goes by that I don't think about Lehman Brothers,” Fuld said yesterday.
Fuld attended the event to discuss his present venture, Matrix Advisors, a small advisory firm said to focus on merchant banking and which was launched less than a year after the collapse of Lehman Brothers. Towards the end of last year, Fuld and representatives of Suzhou Kaida Venture Capital were in Beijing to speak of their intention to secure passage for Chinese firms to make initial public offerings in the US.
“I thought it was time for me to raise my ugly head. Our business is growing. We're building companies,” he said of Matrix Advisors.
US urban areas see uneven recovery
The economic recovery in the US is one of fragmentation, according to a new study of 100 urban areas within the country.
The Brookings thinktank found that almost half of 100 major urban (or metropolitan) areas analyzed in the US were yet to recover jobs lost during the Great Recession. Meanwhile, a third of US urban areas were still to return to the level of output seen before financial uncertainty set in.
“This may be the norm now — extreme variation,” said Mark Muro, policy director for the Metropolitan Policy Program at the Brookings Institution, in a report for the Financial Times.
The study also reveals the uneven experiences of different urban areas. While cities such as Austin, Texas, San Francisco, and Raleigh, North Carolina have recovered impressively to surpass previous peaks by dint of their focus on technology and/or bioscience, for instance, other locales have not been so fortunate, such as Florida or inland California.
In terms of employment growth, Austin topped the US’s urban areas with a 16% increase on its pre-crisis level. The Texan state capital also led the way for an increase approaching 30% on its pre-crisis output growth, along with that state’s most populous city, Houston.
This article was originally published in . It was last updated in
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Tim is a writer with a background in consumer journalism and charity communications. He trained as a journalist in the UK and holds degrees in history (BA) and Latin American studies (MA).
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