Ex-Lehman CEO Fuld Says 27,000 Employees Were Risk Managers

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Lessons Learned: The Return of Lehman’s Dick Fuld

Lehman Brothers Holdings Inc. had 27,000 risk managers -- the firm’s stockholding employees -- before it collapsed in 2008, former Chief Executive Officer Richard Fuld said.

“Regardless of what you heard about Lehman Brothers’ risk management, I had 27,000 risk managers because they all owned a piece of the firm,” Fuld, 69, said Thursday in his first public address since the financial crisis.

Fuld, the keynote speaker at the Marcum MicroCap Conference in New York, called Lehman one of the greatest investment banks on the street. Employees owned more than 30 percent of the stock, he said, before it imploded in September 2008 and made the largest corporate filing for bankruptcy protection in U.S. history.

He recounted his career at Lehman, saying it built a culture based on serving clients. Fuld blamed a perfect storm caused by easy access to credit for the financial crisis.

Prior to Lehman’s collapse, Fuld fired or demoted some of his top risk managers, who were questioning the firm’s rising exposure to mortgages and commercial real estate.

Michael Gelband, head of fixed income, was pushed out in 2007 after opposing Fuld in management committee meetings about the rising risk and suggesting it was time to slow down on real estate. Madelyn Antoncic, head of risk management, was shunted aside to an administrative job when she fought for hedges on some of those investments.

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