Misery Index

As I posted back on Oct. 8, Lehman was being investigated by at least three U.S. attorney offices to see whether Lehman Brothers Holdings, Inc. (LEHMQ), misled investors before its bankruptcy filing.  Those three were the U.S. Attorney's Office in New York's Southern District, New York's Eastern District and in New Jersey.

According to Bloomberg, Lehman bankruptcy lawyer Harvey Miller stated yesterday in a Manhattan federal court that "we are facing three grand jury investigations."    At the time Miller declined comment on whether Fuld was among those subpoenaed.

Today, Reuters and the New York Post is reporting that prosecutors have subpoenaed a dozen executives of Lehman Brothers Holdings Inc including CEO Dick Fuld, in connecting with three grand jury probes investigating the fall of Lehman Brothers.  Sources say the nature of the investigation is whether Lehman executives knowingly made false statements about the health of Lehman before its collapse.  More specifically, Lehman's role in the $330 billion auction rate securities market and possible crimes associated with the New York-based bank's $6 billion June stock issue, according to a person familiar with the case.

Additionally Bloomberg is reporting that investigators have subpoenaed Ernst& Young LLP, Lehman's auditor; U.K.-based Barclays Plc, which bought Lehman's North American brokerage; and the New Jersey Division of Investment, which runs a pension fund that lost $115.6 million on a $180 million investment in the June stock sale, according to people familiar with the case.  It's not clear whether these subpoenas are part of the 12 noted by Miller.

Yusill Scribner, a spokeswoman for U.S. Attorney Michael Garcia in Manhattan, declined comment on who the subpoenas are for.  Garcia, along with Brooklyn U.S. Attorney Benton Campbell, and Newark New Jersey U.S. Attorney Christopher Christie, have increased their resources for possible prosecutions associated with the credit crisis and subsequent bank failures.

Christie, the New Jersey attorney, has subpoenaed documents to determine whether Lehman failed to fully disclose its eroding financial condition at the time of the $6 billion stock offering, according to people familiar with the matter.

Campbell, the Brooklyn attorney, has opened inquiries into whether Lehman executives misled investors about the firm's financial health and whether Zurich-based UBS AG lied to investors about securities backed by subprime mortgages, according to a person familiar with the case.   UBS AG is the European bank with the biggest losses from the global credit crisis.  In a post I made on October 16, the Swiss Federal Banking Commission announced a rescue package for UBS agreeing to put $5.23 billion into UBS.  UBS had been forced to write down tens of billions on bad subprime contracts.

Also subpoenaed by federal prosecutors are Putnam Investments LLC, the Boston-based mutual fund firm that oversees about $163 billion and bought Lehman bonds and shares; New York-based fund manager BlackRock Inc., a Lehman creditor; and C.V. Starr & Co., which is run by ex-AIG CEO Maurice Greenberg, according to the same people familiar with the matter.

MISPLACED MONEY

While prosecutors were looking through Lehman's books, they found the U.S. unit of Lehman owes the European unit of Lehman $2 billion to $3 billion and the European unit owes the U.S. unit more than $8 billion, according to Reuters.  Oddly enough there is a disputed claim from the administrator of Lehman's European unit that $8 billion was transferred from Lehman Brothers European unit to the U.S. unit on the eve of Lehman's bankruptcy filing.

Many of the transactions were credit derivative transactions.  Alvarez & Marsal, a restructuring firm, is unwinding 1.5 million derivative transactions involving about 8,000 counterparties, according to Reuters.  The firm is still trying to locate data related to those trades.  The task is so complex that the restructuring firm is requesting the number of employees be increased from 100 to 400.

U.S. CLASS ACTION LAWSUIT

The Securities Law Firm of Klayman & Toskes has filed several class action lawsuits for customers who purchased Lehman Brothers Preferred Stock, Series J.  The firms included are Citigroup Global Markets, Inc; Banc of America Securities, LLC; Wachovia Capital Markets, LLC; Merrill Lynch, UBS Securities and Morgan Stanley.

According to the Complaint, the Prospectus for the Lehman Preferred Stock J contains material misstatements and omissions.  Specifically, it is alleged that the representations made in Lehman's Prospectus were materially false and misleading because at the time of the Offering, Lehman was already laboring under several negative factors that were not properly disclosed in the Prospectus, including the failure to set aside adequate allowances to cover Lehman's steadily increasing portfolio of underperforming subprime related product, and to adequately write-down residential and commercial mortgage and real estate assets.

The Complaint further alleges that the Defendants could have, and should have, discovered the misstatements and omissions in Lehman's Prospectus prior to filing with the SEC and distribution tot he investing public.  As a result of inadequate due diligence investigation on the part of Defendants, the underwrites failed to discover the misstatements and omission in Lehman's Prospectus on the Preferred Stock J.

For more information visit Klayman and Toskes Lehman page.

SINGAPORE

Singapore's central bank according to a Forbes article, said Friday its investigating allegations of misconduct by commercial bank officials in connection with the sale of about 640 million Singapore dollars ($432 million) of bonds linked to Lehman Bros.

"MAS [Monetary Authority of Singapore] confirms that we have been conducting formal inquiries into allegations of breaches of the law, inadequate or poor sales practices by their representatives," Managing Director Heng Swee Keat said during a news conference in Singapore.

The country's central bank will focus on cases of mis-selling products to "vulnerable" customers, meaning the elderly and those who are not well-educated, Keat additionally stated.  MAS has said that about 10,000 people in Singapore invested in products linked to Lehman Brothers and other institutions hit by a crisis in the US.  The Singapore investors, a large portion of them retirees who stand to lose their life savings, have said they were told they were buying into a product with low risk.  Investors interviewed by AFP said they felt "cheated" and "betrayed" because the banks did not fully inform them of the risks when they were offered the financial products.

According to an AFP article, the investments include "Lehman Minibonds" and "Merrill Lynch Jubilee Notes".  There were also those who invested in "high notes" with Singapore's DBS Bank and Morgan Stanley "pinnacle notes."

According to Reuters, these investors stand to lose over S$500 million ($339 million) in total, according to data provided by the MAS, which said it will make an announcement on action when its investigation is complete.

MAS has added that while it can impose fines and suspend the licenses of financial institutions found to be in breach of its rules, it does not have the power to order banks to compensate investors.

In a rare protest in Singapore, hundreds of investors gathered at a park on Saturday to express their anguish at potential losses from the structured notes that many say were sold to them by banks as safe investments.

Picture Source:  AFP, Irate investors in Singapore.

HONG KONG

In an AP article, two banks on Friday, who weren't identified, were referred for possible sanctions in Hong Kong as part of an investigation into misleading sales tactics in connection with Lehman Brothers investment whose values are in doubt, authorities said.  More than 40,000 Hong Kongers had bought Lehman-related investment products through banks, with the total outstanding value of the products estimated at HK$20.2 billion ($2.6 billion), according to the Hong Kong Monetary Authority.

The Hong Kong Monetary Authority sent securities regulators 24 cases involving allegations of misconduct and "mis-selling" against the lenders, the agency said in a statement.

Also in Hong Kong, thousands who bought Lehman-related products have staged street protests and pressured lawmakers in an effort to protect their investments.

"They were misleading investors on the risk.  They said the minibonds were highly stable," said W.H. Chiu, a 66-year-old retiree according to Reuters.  Chiu said he purchased about US$20,000 worth of minibonds from a branch of the Hong Kong subsidiary of Industrial and Commercial Bank of China (ICBC).  He said he was still fighting to get information on the fate of his investment and feared it would end up as "rubbish."

"The government should step in.  If the government don't pay, they should force the bank to pay," said Marty Chou, the managing director of an import firm in the same Reuters article.  He said he'd invested US$1 million in Lehman-linked products.

Also in the Reuters article, Yau stated that Lehman stated to her father, "They told him 'It's very safe.  It's just right for you.  I just found out that it's a credit-linked derivative," she said.  "He never thought he would suffer any loss."  "Right now, I don't know how long they will have to postpone their retirement.  It's very sad," she said.  "It's a very emotional event for them.  They just don't trust banks anymore."  She said her elderly father had lost US$250,000.

Regulators could impose fines and revoke the banks' license, among other penalties.

Bloomberg and the Washington Post has just published an article that states Hong Kong banks will buy back soured investment products guaranteed by Lehman Brothers Holdings Inc, after investors accused them of misrepresenting the risks involved in the securities.  The Hong Kong Association of Banks, which includes HSBC Holdings Inc. and BOC Hong Kong Ltd, agreed to a government plan to buy back at market prices so-called minibonds that were sold to the public and guaranteed by Lehman.  The banks are working on a formula for the buybacks.

Picture Source: 
  - Washington Post.  Lehman investors  protest in Hong Kong.
  - Reuters.  Investors bought financial products relating to Lehman Brothers march to the government headquarters in Hong Kong.

ADDITIONAL SOURCES:

• CNN Money
• Trading Markets
• Bloomberg
• Singapore News
• Trading Markets
• Reuters via The Boston Globe

Domino's additionally said it will save its cash and potentially make loans directly to its franchises.   And although the pizza company doesn't need access to that cash for day-to-day operations, the fact that it's likely no longer available could hamper long term plans such as stock buybacks.

Like other pizza sellers, Domino's has faced weak domestic demand and higher costs for items like cheese and wheat.  At the same time, U.S. consumers are more likely to make meals at home to save money due to unemployment, and higher food and fuel costs.

Revenues fell 4 percent to $323.6 million.  Sales at U.S. restaurants open at least one year fell 6.1 percent, overshadowing international same-store sales, which rose 5.4 percent.

Domino's said the company may not be able to meet its 2008 growth plans for 200 to 250 stores, and that Domino's expects to close more than the 50 to 75 U.S. stores it had originally planned to shutter this year.

Earlier this year, Domino's assigned 'F' grades to 247 operators, who were put on notice to improve sales or have their operations taken over.  Since then, 111 are trying to improve their stores, while 75 are in the midst of selling their operations.  Some 47 have already been removed from the system and 14 more are still weighing their options.

On Tuesday, shares of Domino's sank 26%, or $2.55 to finish at $7.45.

Of course maybe it would help Dominoes business in the U.S. if they wouldn't resort to calling the phone number you give when you order pizza to tell you specials [The Consumerist], or leaving specials in Ziploc bags weighted down with rocks [The Consumerist], or maybe actually honoring their coupons [The Consumerist].+

I miss the Noid.

SOURCES:

• Guardian UK
• Wall Street Journal
• MLive
• Forbes
• RTT News

"In other words, even as Mr. Fuld was pleading with (US Treasury) Secretary Paulson for a federal rescue, Lehman continued to squander millions on executive compensation," Waxman stated.

Andrew J. Morton was the head of fixed income who was involuntarily terminated.  According to the document, his last day worked was "Week of September 8" with a termination date of "December 1, 2008 (after 12 week notice period, per UK policy)".  His "Special Payment" was $2 million, plus one year's base salary of $200,000 as standard severance.  Fuld stated this was deemed "appropriate for his years of service."  The document states that Morton received $14 million in 2006 compensation, and $12.5 million in 2007 compensation.  Morton had worked for Lehman for 15 years.

Benoit Savoret, the chief operating officer for Europe and the Middle east was also involuntarily terminated.  According to the document, his last day worked was "Week of September 8" with a terminate date of "December 1, 2008 (after 12 week notice period, per UK policy".  His "Special Payment" was $16.2 million.  The document states that Savoret received $12 million in 2006 compensation, and $18 million in 2007 compensation.  Savoret had worked for Lehman for 11 years.

Jeremy Isaacs, who voluntarily terminated was going to be working through year end until December 2008.  His terminate date was listed as March 2009 under the same UK policy.  Isaacs "Special Payment" was $5 million "described as a minimum amount in his agreement letter.  There was an additional term that stated "Any additional amount may be paid, as determined by year end 2008 at the discretion of the Firm and as approved by the Compensation Committee."  His 2006 compensation was $21 million, and 2007 was $22.0 million.  Isaacs had worked for Lehman for 12 years.

Within the document, there was a compensation arrangement for Gerald Donini, the Global Head of Equities, to "facilitate his retention with the Firm".  He was guaranteed a minimum of $20 million in total compensation for 2008 and 2009.

There was also a compensation arrangement for Eric Felder, the recently appointed Global Co-Head of Fixed Income, that he would receive a 2008 cash advance on his 2009 compensation, in the amount of $8.5 million, leaving him to receive $16.4 million (minimum) in 2009.

Rep. Elijah Cummings (D-MD) said, "I don't know how he sleeps at night."

Fuld did take responsibility for the collapse stating, "I want to be very clear. I take full responsibility for the decisions that I made and for the actions that I took based on the information that we had at the time." 

From an email (PDF) obtained for the Oversite Committee, Fuld had felt confident in April 2008, after leaving a dinner with Hank Paulson, the Treasury secretary.  In an email to his chief legal officer, Thomas Russo, , Fuld said that Paulson, the former chief executive of Goldman Sachs, had a "worried view" about Merrill Lynch but that Lehman had a "huge brand" with the US Treasury. 

Fuld had stated in the testimony given that would wonder "until they put me in the ground" why the US government had not rescued the 158-year-old firm but yet saved AIG.  He said that regulators were fully aware of its plight before its collapse. 

FOR SALE

June 2008
It was evidently clear that Lehman was showing the first signs of trouble in June, 2008.  In an email (PDF) from a representative of Centaurus Capital, it stated that many bankers had been calling him in the last days.  That he was worried that "all the hard work we have put in over the last 6/7 years could unravel very quickly."  He suggested that two things needed to happen quickly.  First was some "senior managers have to be much less arrogant and intentionally admit that some major mistakes had been made."  And secondly, "Some changes at senior management level need to happen very soon."  He finished with "We also need to hire a few very senior guys VERY quickly to bolster confidence."

August, 2008
In August, 2008, Lehman's held talks to sell up to 50 percent of its shares to the government-owned Korea Development Bank in South Korean or  China's Citic Securities in the first week of August, but failed to reach an agreement with either.  The South Koreans and Chinese walked away after concluding that Lehman was asking too high a price.  Lehman declined to comment at the time.  Lehman's shares had fallen nearly 85 percent since early 2007.  Lehman's at the time was also considering selling all or part of its holdings, including its troubled $40 billion commercial real estate portfolio and its asset management arm, which included Neuberger Berman. 

The South Koreans discussed a two-step process under which Korea Development Bank would buy a 25 percent stake directly from Lehman and another 25 percent of the shares though a market tender.  The price under discussion was 50 percent above Lehman's book value.  The two sides were said to have been close to a deal but last-minute disagreements ended the talks.

Simultaneously, Lehman met top executives of Citic Securities but these talks never reached the level of those with the South Koreans.

September, 2008
Going into the weekend of September 13-14, just before the bankruptcy filing, Fuld testified he was confident he would be able to sell Lehman to another financial institution.  "When we walked into that weekend, I firmly believed we were going to do a transaction," he said.

"I think Lehman and Merrill Lynch were in the same position Friday night, and they did a transaction with Bank of America.  We went down the road with Barclays but that transaction never got consummated."

Lehman's commercial real-estate portfolio came under review by a number of firms, including Goldman Sachs Group Inc., Credit Suisse Group, Barclays PLC and Bank of America Corp., all of which declined to buy the portfolio.  Some executives who looked at the portfolio say they believe the portfolio was being overvalued by Lehman by as much as 35%, as reported in a page-one article in The Wall Street Journal on Monday.

RESPONSIBILITY, ACCOUNTABILTY, AND FAULT

Congressman Waxman asked Fuld, "I have heard you talk about what you should have done differently, but you don't seem to acknowledge that you did anything wrong."  Fuld did not reply.

Waxman had to say on Fuld success in his career at Lehman Bros, "It seems that the system worked for you, but it didn't seem to work for the rest of the country and the taxpayers who now have to pay up to $700 billion to bail out our economy.  We can't continue to have a system where Wall Street executives privatize all the gains and socialize all the losses."

THROWING MONEY AROUND

Waxman said that in January, 2008, Fuld and his board were warned the company's "liquidity can disappear quite fast."  Despite that warning, he said, "Mr. Fuld depleted Lehman's capital reserves by over $10 billion through year-end bonuses, stock buy-backs and dividend payments."

BONUSES GIVEN FOUR DAYS BEFORE FILING BANKRUPTCY

Waxman cited a memo (PDF), among 24 pages of internal emails from Lehman Bros., showing Lehman recommending four days before the bankruptcy filing that three departing executives received more than $20 million in "special payments."  On September 11, Lehman planned to approve "special payments" worth $18.2 million for two executives who were terminated involuntarily, and another $5 million for one who was leaving on his own.

"In other words, even as Mr. Fuld was pleading with (US Treasury) Secretary Paulson for a federal rescue, Lehman continued to squander millions on executive compensation," Waxman stated.

Andrew J. Morton was the head of fixed income who was involuntarily terminated.  According to the document, his last day worked was "Week of September 8" with a termination date of "December 1, 2008 (after 12 week notice period, per UK policy)".  His "Special Payment" was $2 million, plus one year's base salary of $200,000 as standard severance.  Fuld stated this was deemed "appropriate for his years of service."  The document states that Morton received $14 million in 2006 compensation, and $12.5 million in 2007 compensation.  Morton had worked for Lehman for 15 years.

Benoit Savoret, the chief operating officer for Europe and the Middle east was also involuntarily terminated.  According to the document, his last day worked was "Week of September 8" with a terminate date of "December 1, 2008 (after 12 week notice period, per UK policy".  His "Special Payment" was $16.2 million.  The document states that Savoret received $12 million in 2006 compensation, and $18 million in 2007 compensation.  Savoret had worked for Lehman for 11 years.

Jeremy Isaacs, who voluntarily terminated was going to be working through year end until December 2008.  His terminate date was listed as March 2009 under the same UK policy.  Isaacs "Special Payment" was $5 million "described as a minimum amount in his agreement letter.  There was an additional term that stated "Any additional amount may be paid, as determined by year end 2008 at the discretion of the Firm and as approved by the Compensation Committee."  His 2006 compensation was $21 million, and 2007 was $22.0 million.  Isaacs had worked for Lehman for 12 years.

Within the document, there was a compensation arrangement for Gerald Donini, the Global Head of Equities, to "facilitate his retention with the Firm".  He was guaranteed a minimum of $20 million in total compensation for 2008 and 2009.

There was also a compensation arrangement for Eric Felder, the recently appointed Global Co-Head of Fixed Income, that he would receive a 2008 cash advance on his 2009 compensation, in the amount of $8.5 million, leaving him to receive $16.4 million (minimum) in 2009.

Rep. Elijah Cummings (D-MD) said, "I don't know how he sleeps at night."

FULD & PRESIDENT BUSH'S COUSIN SCOFF AT IDEA TO FORGO BONUSES IN JUNE 2008

Waxman also released emails (PDF) from June 2008 in which Fuld dismissed the suggestion from 2 lower-level executives, Judy Vale and Bob D'Alelio, co-managers of the $15 billion Small Cap Value product (NB Genesis Fund) at a Lehman subsidiary, Neuberger Berman, that the company's top people forego bonuses because "when the 'world' discovers this at next year's proxy, it would send a strong message to both employees and investors that management is not shirking accountability for recent performance." 

On Lehman's executive committee is George H. Walker, President Bush's cousin who shot down the idea, according to the emails.  He responded back to all of the executives who had received the original email. "Sorry team.  I am not sure what's in the water at 605 Third Avenue today, but Amato and I clearly have some work to do (given the today's similar emails from Marvin Schwartz, Michael Kaminsky and now Judy.) "  "The compensation issue she raises (Judy Vale and Benjamin Segal on one hand versus Marvin Schwartz and Jeff Bolton on the other) is a particular issue for a small handful of people at Neuberger and hardly worth the EC's time now."  "I'm embarrassed and I apologize."

Fuld then wrote to Shelby Lauckhardt on the matter:  "Don't worry - they are only people who think about their own pockets."

OUTBID ON LOBBYING

Rep. John Mica (R-FL) stated that he had pulled Lehman Brothers contributions to Federal candidates for the past 10 years.  Mica pointed out that Lehman Brothers gave about $300,000 to influence members of Congress. 

The biggest recipient has been the Democratic Senatorial Campaign Committee at $47,000, including $10,000 last year.  Lehman Bros gave another $10,000 tot he Republican Senatorial Campaign Committee.  The most recent federal donations, $5,000 in May, went to a political action committee funded by Wall Street firms -- some of which no longer exist -- that gave to an array of politicians.

Fuld personally also gave directly to politicians.  In March of 2007, $2,300 went to John McCain and in May of 2007, $2,300 went to Barack Obama.  New York Senator Charles Schumer has taken $6,000 from Fuld.  Joseph Lieberman has taken $7,000.  Another $9,600 went to Dodd, including $4,600 last year when the Senate banking committee chair was running for President.  Fuld gave $4,600 to Clinton for her presidential run as well.

Since neither Clinton nor Dodd made it past the primary, they were obligated to refund the $2,300 checks he gave to them for the general election campaigns that never came to pass.  Dodd sent back the $2,300 on August 21.  Clinton gave her's back a week later.

But during the same time,  Fannie Mae and Freddie Mac gave $175 million dollars in lobbying contracts over the same 10 years.  Mica asked Fuld what he thought of that, and Fuld's reply, with a smirk on his face was "I think that's more of a matter for your committee sir."

AFTER THE TESTAMONY WAS OVER

Waxman concluded the session with a bit of lecture to Fuld.  "I accept the fact that you're still haunted at night about the collapse of Lehman," Waxman said.  But, he added, "I don't accept the fact that you assert the system worked when you lost your stock."

As the hearing came to a close, Fuld slipped into back offices meant for legislators rather than walk past protestors who had gathered at the hearing.  When Fuld emerged, the protestors followed him out of the building, shouting:  "Criminal!"  As he stepped into a waiting black SUV, Fuld stopped, turned and started at one woman.  He then got into the car and was driven away.

THE ENTIRE HEARING CAN BE VIEWED ON THE OVERSIGHT COMMITTEE'S WEBSITE.

UNDER INVESTIGATION BY MULTIPLE U.S. ATTORNEY OFFICES

At least three U.S. attorney offices are probing whether Lehman Brothers Holdings Inc misled investors before its bankruptcy filing. 

U.S. Attorney's Office, New York's Southern District

The U.S. attorney's office for New York's Southern District, in Manhattan, is investigating whether Lehman valued its assets at artificially high levels.  That office has issued subpoenas to individuals that focus on what the firm told investors and other parties about is valuations for approximately $32.6 billion in commercial-real-estate holdings.

Lehman's commercial real-estate portfolio came under review by a number of firms, including Goldman Sachs Group Inc., Credit Suisse Group, Barclays PLC and Bank of America Corp., all of which declined to buy the portfolio.  Some executives who looked at the portfolio say they believe the portfolio was being overvalued by Lehman by as much as 35%, as reported in a page-one article in The Wall Street Journal on Monday.

The Manhattan prosecutors are also interested in whether Lehman improperly moved $8 billion from its London operations to New York just ahead of its bankruptcy filing, a move that has drawn criticism from creditors and accountants.

U.S. Attorney's Office,  New Jersey

The U.S. attorney's office in New Jersey is investigating whether Lehman misled New Jersey's pension fund when it provided information about its financial health in connection with a $6 billion stock offering in June.  New Jersey invested $180 million in the offering.  Its loss on the investment totals about $116 million.

U.S. Attorney's Office, New York's Eastern District

The U.S. attorney's office in New York's Eastern District, in Brooklyn, are probing whether Lehman executives misled by misrepresenting the firm's condition by making upbeat comments during conference calls with analysts and investors. 

PUNCH OUT

As for getting punched in the face, it seems that Fuld was "attacked" on a Sunday shortly after it was announced that Lehman Brothers was bankrupt.   Following rumors that the incident had occurred, Vicki Ward, a US journalist said "two very senior sources - one incredibly senior source" had confirmed it to her.  "He went to the gym after... Lehman was announced as going under," she told CNBC.  "He was on a treadmill with a heart monitor on.  Someone was in the corner, pumping iron and he walked over and he knocked him out cold.  And frankly after having watched this, I'd have done the same too."

Lehman Brothers however, has denied the story going around that Fuld was punched.  They claim, in typical denial fashion, that the story is both "completely absurd and completely untrue."  Furthermore, according to Charlie Gasparino, who did the original CNBC report, they insist Fuld wasn't punched or even looked at the wrong way at any point in the weeks surrounding Lehman's collapse.

QUICK STATS ON RICHARD S FULD JR

Richard Severin Fuld Jr is 62 years old (04/26/1946) and has been CEO of Lehman Brothers Holdings (LEH) for 15 years.  Fuld has been with the company for 39 years.  His education is a BS from University of Colorado at Boulder in 1969, and a MBA from New York University's Stern School of Business in 1973. 

While attending the University of Colorado, Fuld participated in the Naval Reserve Officer Training Corps program and was president of the school's chapter of the Alpha Tau Omega social fraternity.  His career as an Air Force pilot came to an abrupt end when he got into a fist fight with a commanding officer. 

After graduating with a bachelor's degree in international business, Fuld then began his career with Lehman Brothers in 1969 beginning as a commercial paper trader. 

• August 1984 - August 1990:  Vice Chairman of Shearson Lehman Brothers
• August 1990 - March 1993:  President and Co-Chief Executive Officer of the Lehman Brothers Division of Shearson Lehman Brothers Inc.
• 1990 to September, 2008:  Director of Lehman Brothers Holdings and The Federal Reserve Bank of New York.
• January 1993 - March 1993:  Co-President and Co-Chief Operating Officer of Lehman Brothers Holdings Inc and Lehman Brothers Inc.
• March 1993 - April 1994:  President and Chief Operating Officer of Lehman Brothers Holdings Inc and Lehman Brothers Inc.
• April 1994 - September 2008:  Chairman of the Board of Directors of Lehman Brothers Holdings Inc.
• November 1993 - September 2008:  Chief Executive Officer of Lehman Brothers Holdings Inc and also its subsidiary Lehman Brothers

2007 Compensation (Total):  $71.90 million
  -  Salary:  $750,000
  -  Bonus:  $4,250,000
  -  Other:  $26,620,000
  -  Stock Gains:  $40,280,000
5-Year Compensation (Total):  $354.03 million

Additional offices:

• Chairman & Chief Executive Officer, Lehman Commercial Paper, Inc., a subsidiary of Lehman Brothers Inc.  Operates as a commercial money market dealer and it offers financial services.  The company buys & sells commercial paper & other money market instruments for its clients.  Based in Jersey City, New Jersey.   It's estimated annual sales had been around $76 million.  The company started in 1990, and filed Chapter 11 bankruptcy on October 5, 2008 listing an estate with assets of $100,000,001+ and liabilities of $100,000,001+.    In the filing,  Lehman Commercial Paper, Inc filed a "First Day Motion" seeking authority to (i) continue   to utilize its agency bank account (ii) terminate its agency relationship, and (iii) continue to "evaluate" participants under its loan participation.  The First Day Motion is available by clicking here.
• Director, NYC2012, Inc., a non-profit organization created to promote New York in the competition for the 2012 Olympics bid.
• Chairman, US Thailand Business Council, Focuses on building long-term relationships between U.S. companies and key members of the Thai public and private sectors.
• Trustee, Mount Sinai Medical Center of Florida, A private not-for-profit teaching hospital.
• Director, Ronald McDonald House Charities, Inc., A charitable institution that offers programs focusing on the health and well being of children.
• Director, The Partnership for New York City, Inc., A non-profit organization focusing on research, policy formulation, and issue advocacy at the city, state and federal levels.  It formulates policies by economic impact studies.  The company also invests in economic development projects.
• Director, The Federal Bank of New York., The Bank supervises and regulates financial institutions to maintain payment systems in New York.
• Director, Robin Hood Foundation.,  Provides grants, strategic support services, and management assistance to community based programs fighting poverty.  It also offers employment programs, lower income victims' services and relief, mental health services, and other grants.
• Trustee, Middlebury College
• Former Trustee, The Mount Sinai Hospital
  

On March 30, 2008 Fuld owned 1.96 percent of Lehman Brothers Holdings, worth about $436,800,000 million.  (Numbers from Forbes.Com)  He also at one time held a position on the Board of Governors of the New York Stock Exchange.

Fuld owns a $10.8 million Greenwich estate that he calls home.  Built in 1936 and purchased by Fuld in 1993 for $7.3 million, the eight-bedroom house has a tennis court, pool and indoor squash court.

Fuld also owns a home on Florida's Jupiter Island, purchased for nearly $14 million in 2004.  He owns a ski house in Vermont.   He still owns a summer vacation home in Sun Valley, Idaho.  He still owns a  full-floor, 16-room, four-bedroom, 5 1/2 bath apartment, which features several fireplaces and six staff rooms, purchased for $21 million in early 2007, that possibly required $10 million in renovations..  Fuld and his wife also owned an art collection with million-dollar paintings. 

Fuld and his wife Kathy have three kids, Jacqueline, Chrissie, and Richie.  Fuld is listed as a registered Democrat and belongs to the New York-Presbyterian board.

Fuld was once worth close to $1 billion and now has a net worth estimated at about $100 million.  He and his wife have been forced to sell some of their renowned art collection.

To learn more about Fuld's rise to power with Lehman when he took over, "The Improbably Power Broker" article from FORTUNE Magazine in 2006 is probably your best bet.

DID YA KNOW?

When Lehman purchased their new building and moved into it in 2002, he ended casual dress.  "We were moving into a new building, and we were going to have a ton of clients there, and although I had allowed casual dress, I was dead-set against it," said Fudd.  "If you dress sloppy, you think sloppy.  Actually, I was even more violently opposed to it than that."

When a reporter told Fuld during an interview, that he could spot members of his company in the Midtown neighborhood they attire -- the women conservatively dressed and the men almost exclusively in white or blue shirts and tied -- Fuld beams.  "I love the way they look."

PERSONAL COMMENT

I'd love to see "Dick" be stripped off all his accounts, credit cards, homes, cars, cell-phones and corporate and friend associations for 45 days, starting out with only $100 and the clothes on his back, and be homeless in say, Los Angeles, far from home to see exactly how much of a financial guru he really is.  And to let him know what the "real world" is really like.

INFORMATION SOURCES

• Telegraph, UK
• Gothamist
• The Boston Globe
• The New York Times
• LA Times
• Herald Sun
• The Age
• Wall Street Journal
• Financial Times
• Business Week
• Credit Investment News
• Securities Industry and Financial Markets Association (SIFMA)

PICTURE SOURCES

• The New York Times
• Unknown