Two Decade Insider
Joseph Tibman
In His Own Words


The Murder of Lehman Brothers Prologue

Prologue An Insider's Look at the Global Meltdown‎

While I was not present for what I describe below, the story is true and, at Lehman,was legend, especially among tenured veterans of the firm.

On this one page, I have allowed myself reasonable poetic license. Still, as I have known and observed both of the men I describe, and heard the story first-hand from Fuld with Kaplan confirming it, I believe I have nailed the tenor of this event.

Piled high with the usual paperwork, Allan Kaplan, an old-school
senior executive, whom many came to regard as the “conscience of
Lehman Brothers,” sat as his desk. Dick Fuld, one of the fixed
income1 traders, appeared in his office door.

Kaplan, as always, continued methodically working through the piles
stacked and arranged in perfect right angles before him. He glanced
expressionlessly in Fuld’s direction, returned his gaze to the work on his
desk. Kaplan acknowledged the figure in his office doorway, just loud
enough for Fuld to hear, and then ignored him as he continued his
progress through the great volume of paper that required his attention, his

Fuld was unable to shuffle his feet in the threshold of Kaplan’s office for
very long, and like a shark that must keep moving to live, strode to the
senior executive’s desk, announcing that he required a signature so that he
could complete a profitable, time-sensitive trade. Kaplan lifted his head,
placed his half-smoked Cohiba in an ashtray and blankly looked at the
impertinent, headstrong Fuld. Moving only his lips, he informed Fuld in
crisp words that seemed to disappear into the pile of the carpet, that he,
Kaplan, from his mile-high aerie, would consider approval of Fuld’s trade
once his desk was clear of the many piles.

Fuld, his veins filled with adrenaline rather than blood, could not sit on
this trade. Every second that passed increased the risk that he would lose
it. For Fuld, it was all about the moment. In this one, as in so many others,
he saw the purpose of his very existence and that of his firm as one: to
make money. It was written in stone that no one wanted to rub Kaplan the
wrong way. To do so could precipitate unpredictable wrath. But Kaplan
was increasingly an anachronism. Time would not stand still to accommodate
the outdated approval process that tied Fuld’s hands.

To consummate the trade, Fuld required Kaplan’s immediate sanction.
Making the situation doubly frustrating was a clear expectation, undoubtedly
shared by Kaplan, that the trade would be quickly approved once the
titan’s eyes fell on the paperwork. Slam-dunk. But Fuld was tangled in the
red tape of this powerbroker, known for his traditional, understated manner,
as well as limited tolerance for hotheads who came to him halfcocked,
ill-prepared, or disrespectful of the process.

Still there was a monetary bottom line and it flashed neon in Fuld’s
eyes: the trade will not wait. Kaplan, still ignoring him, had become an
intolerable brick wall. And so, acting on pure impulse and instinct, the
very innards of the best traders, Fuld cleared Kaplan’s desk with a single
sweep of his arm, scattering the exalted one’s neat piles around his desk.
Sucking in his breath, Fuld told the implicitly fearsome Allan Kaplan that
now he could approve the trade; his desk was clear.

If Kaplan flinched, it was not visible to the human eye. But he did fix
his stare on Fuld, eyes widening, this, the only discernible reaction. Fuld’s
cheeks filled with blood as he awaited his fate. Inwardly, Kaplan smiled
puckishly. Yes, he was amused and impressed. This Fuld had potential.
Kaplan silently reviewed the documents requiring his approval of the
insubordinate trader’s transaction, and with dispatch, delivered his signature.

Fuld rotated on heels of wing tips, utterly in the dark as to what the
poker-faced Kaplan had in store for him. Would he even have a job the
next day? But Fuld was in the moment, like the best of traders, the risk
takers, and held the authorization to trade in his hand.
Many years later, in May of 2003, Dick Fuld stood before a packed
chapel of mourners, including numerous employees of the firm that Fuld,
now CEO, transformed into a major force on Wall Street. He lauded and
joked affectionately about Kaplan, making great mention of his deceased
colleague’s integrity and ethics, and about the suit pants Kaplan belted so
high — Fuld affectionately chuckled — that they reached Kaplan’s chin.
Until a week before, Allan Kaplan had been fully engaged at Lehman,
despite a festering illness, serving the firm he had made his second home
for thirty-six years. In summing up Kaplan’s tenure, Richard Fuld, the
hard-assed titan, one of the most powerful men on Wall Street, always
bursting with testosterone, choked tearfully on his closing words: “Allan
was my friend.”

Fuld would later honor Kaplan by naming the auditorium on the lower
level of Lehman’s majestic Time Square tower after him. He wanted to do
something. And it was a fine gesture. But the man called the conscience of
Lehman had expired.

Click here to further explore book, including review quotes, at Amazon


I think I got a plug on today posted a piece today on the upside of unemployment.  As I intimated in my book I was at least temporarily unemployed at some point after Barclays scooped up Lehman.  The article talks a bit about my writing of the book is the product of having time to focus.  While meant in good fun, the article speculates that the book was an opportunity for me to vent or rant.  Clearly, the reporter had not read the book.  With one notable exception, the professional reviews have all been positive, and have generally noted that my telling is balanced, humanizes the firm, lets no one off the hook, but also has no ax to grind., the Lehman alumni website, perhaps not the most high-profile of reviewers, but certainly one very familiar with events at Lehman had the following to say:
      "The book is particularly valuable because it presents a more human figures of what has become the symbol of this financial crisis without trying to settle personal accounts."

link to review
link to story 


What Caused the Great Recession?

"A global recession became inevitable once the government decided not to rescue Lehman Brothers. "

Comings & Goings: A Lehman Reunio

Bart McDade and Alex Kirk: It looks like two more Lehman Bros. executives have found work. The New York Post reported that top trader Kirk is to be joining with the former second-in-command, McDade, to launch a fund called River Birch Capital.

L. Randall Wray: Fire Geithner Now!

"Geithner's closest advisors were Thain, William McDonough (Vice Chairman at Merrill), Gerald Corrigan (Managing Director at Goldman), Jamie Dimon (also Goldman), and Richard Fuld of Lehman's"


Excerpt from Murder of Lehman

"The team from Lehman was devastated. It appeared an agreement had come together to save the firm and its employees, only to be snatched from their hands as they readied to ink it. Bart McDade, by Sunday afternoon, called Fuld to deliver the news. Fuld was stunned. I suppose, like many of us at Lehman, he never believed the government would let Lehman fail. In Dick’s case, however, it was more personal. He believed that all the months of courting Paulson ensured that Lehman would benefit from a worst-case-scenario safety net. As far back as April, following a dinner with Paulson, Fuld had said we “have huge brand with Treasury.” At last he understood what other Wall Street CEOs had gleaned that recent Friday evening: Lehman was not considered essential by Paulson."

Lehman default hit CSOs hardest, says Standard & Poor's

Pickens Said to Have Sold $42 Million of Lehman Claims to RBS

The Lehman Lesson and pain thresholds…

The Myth of Dick Fuld

Some explosive comments on this post.  I do agree that exec compensation has been wacky, but I also don't think reducing it will solve our problems.  There are two separate issues: Totally in a vacuum, is exec comp too high?  Of course it is.  Second, will people take less risk because they have something, but not as much to gain? Doubtful.  For many of the people who took the biggest risk it was more about winning than the actual dollars.  How many people would see their lifestyle noticeably change if their fortune fell from $1.5 billion to $500 million?

The Decade of Discontent

Dick Fuld from Lehman denied all the way to the end his company was in such dire straits

Culture Crash

A Lehman Brothers insider reveals why the firm’s best traits turned out to be its worst.

HOPE GREENFIELD is former chief talent officer and managing director at Lehman Brothers. She now heads her own management consultancy.

This is an excellent piece, definitely worth reading.  Ms. Greenfield is extremely classy in the way she covers the circumstances of Lehman's fall.  Some might say she goes way easy on Fuld and Gregory. From my perspective, she takes the high road and lets the events and developments she describes speak for themselves when it comes to personalities.  She does, however, offer some true insight. Read this.

The Biggest Business Bankruptcy Filings of the Decade

The Biggest Financial Deception of the Decade

Lehman Brothers' mini-bond fiasco weighs on HK banking system outlook

Linklaters advises on Lehman Brothers International (Europe) claim resolution agreement to return client assets, which receives overwhelming support

What is left of Lehman Brothers?

just found this video

Lehman’s Plan for Claims Draws Fire From Banks


Smile or Die: How Positive Thinking Fooled America and the World

Later, we watch Richard Fuld, former chairman and CEO of the now-defunct Lehman Brothers, pace through the rooms of his various properties at night, racked with insomnia. Over and over he asks himself: “What could I have done differently?”"

Wolinsky of Guru Focus likes Murder of Lehman