Looking Back at Lehman's Collapse With the Woman Who Fell Farthest

Erin Callan's new memoir recalls the steep price she paid to become Lehman's CFO just in time for the financial crisis.

What Erin Callan Did After Lehman Collapse

As the financial system was teetering and about to collapse, Erin Callan had a prescient exchange with one of her colleagues at Lehman Brothers. It was Nov. 29, 2007, and news that the co-president of Morgan Stanley, Zoe Cruz, had just been fired after her firm took a $3.7 billion loss on subprime mortgage securities was flashing across TV screens all over Lehman's trading floor. Joe Gregory, the chief operating officer of Lehman, popped into Callan's office. "Did you see the Morgan Stanley news?” Gregory asked. “The news about Zoe?” Callan, who was about to take over as Lehman's chief financial officer, was distressed. Cruz was one of the highest-ranking women on Wall Street. Without her, Callan would be left standing nearly alone as a female atop a male-dominated industry, like a weather vane attached to a roof that may or may not have been sound. The parallels with Cruz's situation were obvious. 

"Zoe’s destiny was my possible destiny," Callan writes in a new memoir published Monday. "Her story was similar to my story in a big picture way."

Callan wrote her book, Full Circle: A Memoir of Leaning In Too Far and the Journey Back, to try to share the lessons she learned—painfully and publicly—about the dangers of prioritizing one's career ahead of everything else. She now sees that her total obsession with work and achievement came at the expense of everything else in her life, including meaningful personal relationships. Lehman turned out to be at the center of the financial crisis and ultimately filed for bankruptcy in September 2008. Callan had left the company months before, but she was still shamed and humiliated, her face appearing like a mug shot on newspapers across the country.

Without her high-octane career and the accolades that went with it, Callan writes, she felt completely lost. Her lowest moment came when she tried to overdose on sleeping pills and was rushed to Southampton Hospital on Christmas Eve. 

Years later, Callan is happily married to Anthony Montella, a retired firefighter, and living a quiet life on Shelter Island and in Florida. After years of trying, they had a baby girl last year. Callan considers herself very lucky. The cover of her book, which she says she chose to self-publish rather than subjecting herself to the marketing gauntlet that would have come with a traditional book deal, shows the author cuddling her plump-cheeked daughter Maggie. It seems to be the image of a life fulfilled. While the cautionary work-life balance angle of the book is powerful, Callan's memoir will also serve as an important part of the historical record of what went wrong at Lehman and on Wall Street in general. It offers a case study of the sort of overachiever personality that thrives in finance, which carried Callan to the top of the industry.

But a certain kind of reader will be turning the pages for insight into Callan's hardest moments. She had been in the CFO job for three months in March 2008 when rumors and speculation about Lehman's exposure to subprime mortgage losses became increasingly intense. She, and she alone, was appointed to make Lehman's first-quarter earnings announcement on a conference call heard by thousands of skeptical investors. Bear Stearns had just been sold in an emergency bailout to JPMorgan Chase for two dollars a share, and the market was predicting that Lehman might be next. Callan's job was to try to reassure Wall Street that Lehman was fine by delivering remarks that had been carefully crafted, she writes, by many people at the firm. She felt completely overwhelmed—she was so new in her position that she barely had a grasp of Lehman's complex finances and mortgage-bond holdings. "Good luck," Dick Fuld, Lehman's chief executive, told her as she prepared to walk the gangplank. Later, after it became clear that things were markedly worse that she presented them at the time, Callan was accused of misrepresenting Lehman's health to its investors. She is still upset that Fuld and Gregory sent her to do the conference call on her own under such fraught circumstances. 

"From what I understand in all the litigation and investigations I have been involved in over the last four years, I have heard secondhand that Dick and Joe have both suggested they don’t remember reading the earnings speech prior to the conference call," she writes. "They have also suggested they don’t remember actually listening to the call."

In addition to rebuilding her life and finding a kind of calm, Callan writes of another cathartic moment that came in January 2015. She got a phone call from someone she hadn't spoken to in more than six years. “Erin," a man's voice said, "it’s Dick Fuld.”

Fuld had one important message to convey, Callan writes: He was sorry for having put her in that position, and he wanted her to know that what had happened back in 2008 wasn't her fault. Callan writes: "He said everything I had wanted to hear for so many years."

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