Fire Fuld? (Updated)

9 June 2008

2 minute read

Fuld has ditched his CFO and COO, but should he himself follow in the footsteps of Stan O'Neal, Chuck Prince, Marcel Ospel, Mark Litzler and Wachovia's Ken Thompson?

At the very least, Dick has proven short-sighted.

In April, he declared the worst of the credit crunch to be past. And last month the now departed Erin Callan told CNBC that Lehman would have no need of raising additional cash.

Needless to say, this is no longer the case. Lehman has now posted a huge $2.8bn Q2 loss, is raising (or at least trying to) another $6bn and announced its quarterly results early after its stock plummeted 48% last Monday.

There's also a slight whiff of ineptitude (or it confusion?). On one hand, Lehman has ditched $120bn of illiquid assets in an attempt to bolster its balance sheet. On the other, it appears to have squandered precious capital trying to prop up its share price.

Lehman came perilously close to the edge under Fuld's stewardship in 1998, when the bank's shares plunged 50% following the Russian crisis. The precipice is now in sight again.

Is Fuld's apparent blindness compounding the risk that Lehman will fall? Or is he still the best man to navigate a return to safer ground? Dump or defend Dick below.

AUTHOReFinancialCareers UK

Insider Comment

Ka
Karen Dahl
18 June 2008
I find it fascinating that anyone finds this blurbsome rambling about who knows who interesting enough to publish or comment upon.
Whilst all very cosy for those in the circle of acquaintance, outside that circle, including investors and Financiers, there is zero interest in the rather turgid gossip. Indeed such idle chatter highlights very clearly the vanity of banking circles and indeed the demise. Vanity is all very well in it's place, at the bathroom mirror. In the world of business, business must be done. Focusing on individual gain does not make money.
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JK
JK
13 June 2008
Bart McDade is the man to replace Fuld, now.
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Lo
Lopes
13 June 2008
Fuld cannot distance himself from Gregory. They were big pals and there's no way Gregory would have done something without Fuld's say. Dumping him is a crass case of self-preseveration.
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So
Soldier
12 June 2008
The mistake was Fuld's. He was the man who leveraged Lehaman up and loaded it with dud debt when things were good. He is the man who should go now that things are bad. Callan wasn't up to much either though.
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Go
Go now
12 June 2008
Fuld getting rid of Callan stinks of desparation and finger pointing. Where was he while she was telling everyone everything was fine and Lehman had no need of extra cash? And what is going on with that extra cash by the way? Anyone?
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