Lehman Bros. CEO Richard Fuld, pictured here last January at the World Economic Forum in Davos, Switzerland, testified Monday before the House Oversight and Reform Committee.
On Monday, the House Oversight and Reform Committee took a look into the collapse of Lehman Brothers as part of a larger review of the factors leading to the current economic crisis, and it wasn’t a pretty sight. Judging by the committee’s account, leaders at Lehman Bros. disregarded key warnings of impending trouble and cut hefty checks for their fellow executives even as the firm teetered on the brink of disaster.
The New York Times:
The first Congressional hearing into the causes of the financial crisis began with a portrayal of Lehman Brothers as a firm run by irresponsible leaders who continued to reward executives and spend billions on stock buybacks and other capital-depleting programs even as internal documents warned about the impending crisis.
“It was a company in which there was no accountability for failure,” the chairman of the House Oversight and Governmental Reform Committee, Henry A. Waxman, said in his opening statement.
One Lehman document among thousands reviewed by the House committee showed that four days before the bank filed for bankruptcy protection, Lehman’s compensation committee was asked to grant $20 million in “special payments” for three executives who were leaving, Mr. Waxman said. An e-mail exchange recommending a delay in bonus payments was apparently brushed aside.