Scapegoats

Does Dick Fuld Deserve Our Scorn?

New York on the culture the Lehman CEO created.

Dick Fuld, CEO of Lehman Brothers, has become one of the singular pariahs of the financial crisis. New York magazine concludes that it was the culture Fuld created, not his actions towards the end, which doomed his firm. Brought aboard in 1994, Fuld nurtured traders with a working-class resentment against "fucking bankers" with Ivy league diplomas. When the markets turned sour Fuld refused to bend, handing out plastic swords to his traders to urge them into battle. That summer, though, "the reliable us-against-them mentality seemed to create blind spots. There was a disconnect to the outside world, and the risk was substantial." Fuld worked the phones searching for a buyer, but Lehmen wasn't tied in to the financial firmament in the same way other big banks were. "Starting Friday night, September 12, a series of meetings was convened at the Fed’s concrete fortress on Liberty Street. Paulson and Tim Geithner, head of the New York Fed and now secretary-designate of Treasury, had summoned the heads of the country’s largest investment banks." Fuld wasn't even at the table.