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Unfortunately I believe that we are limited in what we can focus on. I think that if we proceed with the partisan sideshow of prosecuting Bush admin. officials, healthcare will get lost in the brouhaha.
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A Fallen Titan's Carefully Chosen Words

POSTED: 07:18 AM ET, 10/ 7/2008 by Derek Kravitz

Richard S. Fuld Jr., former chief executive of the now-bankrupt Lehman Brothers investment bank, was the first financial titan to testify at the first congressional hearing aimed at finding the root causes of the nation's financial crisis.

There were no major revelations during yesterday's hearing, The Associated Press noted. But it did allow lawmakers to grill one of the corporate heads who earned hundreds of millions on seemingly risky investments that ultimately led to the economic meltdown.

"You made all this money by taking risks with other people's money," said Rep. Henry Waxman (D-Calif.), the panel's chairman. "The system worked for you, but it didn't seem to work for the rest of the country and the taxpayers, who now have to pay $700 billion to bail out our economy."

Many of the questions Fuld answered focused on his large cash bonuses (and a Wall Street Journal report that said the FBI had begun an investigation into whether Lehman executives misled investors about the company's financial condition). As CEO, 62-year-old Fuld personally netted $40 million last year, including a $4.3 million bonus. His total compensation during the company's best four years, between 2003 and 2007, were more than $260 million.

But to describe his company's downfall, Fuld used somewhat subdued terms in front of the House Oversight and Government Reform Committee. One of the most-commonly used words Fuld employed was "believe" (which he said 31 times). He used the words "sorry" 12 times (although he did not actually apologize for any personal or corporate wrongdoing, he rather took "full responsibility" for Lehman's failure, saying he was "wrong"); "shareholders" eight times and "risk" five times.

Here's a look at some of the most common words Fuld used during his question-and-answer session with congressional lawmakers and some of the examples of his word choice:


Tag cloud of Fuld's testimony created at

"At the end of 2007, I did not believe, at the time, that we had a liquidity problem. And our most important assets in the firm are clearly our employees. They are the ones that touch the clients every day and do business every day."

"I'd like this committee also to know I got no severance. I got no golden parachute. I had no contract. I never asked for a contract. I never sold my shares. That's why I had 10 million, because I believed in this company. I believed that this company -- that's why I said, 'I'm glad I got these last two quarters behind us. I believe we're on the right track.' I could have sold that stock. I did not, because I firmly believed that we were going to return back to profitability and get back on the road."


"The majority of my stock, sir, came -- excuse me, the majority of my compensation came in stock. The vast majority of the stock that I got, I still owned at the point of our filing (bankruptcy)."


"I, like a number of other people, thought the mortgage crisis was contained to residential mortgages. There were a number of people -- many experts included -- that also thought that. And I was wrong."


"Look, I am not proud of the fact that I lost that much money. But it does show that the system, our compensation system, did work. I left 10 million shares plus a whole number of options. As I said, I'm not proud of that. But when the firm did not do well, I was probably the single largest individual shareholder. I don't expect you to feel sorry for me. I don't mean that. That's not my point. My point, though, is that the system worked."

By Derek Kravitz |  October 7, 2008; 7:18 AM ET
Previous: A Look Back at the 'Keating Five' | Next: 'Light' Cigarette Debate, Stevens Trial, Wiretapping in Brazil


Please email us to report offensive comments.

The "word" thing is stupid. Just write a factual article.

Posted by: Alex | October 7, 2008 8:27 AM

"the SYSTEM WORKED"!!!!!!!!!!!

HAHAHAHAHa no little plebes, the system does not work. Stop giving your money to thrifts, leave it in the bank. If you don't know the difference you are part of the problem!

Posted by: norom | October 7, 2008 8:31 AM

Not buying the "we believed it to be ok" Bank execs anticipated this fallout. Dig into their personal accounts at the end of last year. Rats were leaving the sinking ships.

Posted by: Lisa | October 7, 2008 8:44 AM

Agreed, keep buying people, the system works, it works so well, now it's golden opportunity to buy stocks. Buy, buy, buy, they are so cheap, so low... so the hedgefunds, investment banks, money managers and all their financial corps and friends can exit in orderly manner. And when the stocks tank again soon, system will work very well.

Posted by: arthur | October 7, 2008 8:47 AM

Another Congressional hearing so lawmakers might look busy, might appear to care, might demonstrate their "indignation", their righteousness, to the American People and still, when all is said and done, manage to get nothing accomplished and convince no one that they have sold us all down the river on behalf of their cronies.

They'll point fingers, bluster a lot, and hope the American People forget their treason. Great Congress we have here. Hold a hearing, look busy and pray for re-election. Good luck there.

Posted by: M.L. Bushman | October 7, 2008 8:50 AM

This criminal (Fuld) should wear prisonclothes and handcuffs. I wonder how much of the 260M ended up in taxes?? Any?
What do you think he will vote? REP? But of course!
These criminals have now even ripped off tradional savers with their deceptions.
He should be di-owned along with his other execs to repay a part of their damage done.

Posted by: Robert | October 7, 2008 9:10 AM

Until the US has a more regulated systenm like Canada has your banks will continue to fail. When you can give a mortgage to someone on a wink and a handshake without checking to see if they actually make enough money to pay for it. Why are there all these foreclosures? Because people should not ahve been given the money in the first place. I feel bad for all of you really, nobody should have to lose their home and their money in a failing bank but the greed of your government and let's face it, the majority of Americans has reared it's ugly head and has bit back. Unfortunatley, it's also dragging the rest of the world down with it.

Posted by: David | October 7, 2008 9:18 AM

Personally, if they have the moxie to do so, I believe that Congress should throw the book at Fuld: Throw the crook in prison and confiscate "all" of his assets. Who cares about his family?!? He didn’t care about the families that he destroyed. But alas, Congress will instead reward him forit. Go figure!

Posted by: Joe Allard | October 7, 2008 9:23 AM

Yet another moment not to feel like a proud US citizen!!!

Posted by: Will | October 7, 2008 9:42 AM

We won't get Fuld again!!!

Posted by: Andrew Gallagher (Monaco) | October 7, 2008 9:52 AM

The problem I see is - most of the people in the Financial Industry in America does not know about money, risks and their implications. It's easy money for them. I know quite a lot of MBAs from Wall Street and they don't know the basics and they always keep talking about how much money they are going to make. I don't see any responsibility in the people in financial industry and in the financial education as well. I know a guy very closely who is now doing his MBA Finance from NYU Sterns. How can you expect better results with these guys running your money?

Posted by: Prasad | October 7, 2008 10:08 AM

Clearly we need government to save us from ourselves. The Canadians and fellow socialists are morally superior and we should follow their poster boy Barak to the land void of greed, avarice and thoughts of entrepreneurship. Let's call it Narnia... wait no, that insinuated there is a God.

Posted by: TJ | October 7, 2008 10:13 AM


Sir, if you would look into his record, you'd see that he gives much more freely to the Democratic Party and is tied more closely to them. Typical lefty to come out and automatically tie him to the rep party. Do some research before throwing out baseless accusations...please.

Posted by: Anti-Robert | October 7, 2008 10:19 AM

Cheese-n-rice!!! When will people realize that your congressmen/women ARE part of the problem not the solution - the people that run this country should be run out of this country! I'm voting for Obama but wish that Sarah Palin was his runnig mate!

Posted by: LS | October 7, 2008 10:26 AM

The directors, screen play writers and all the creative artists behind the financial mess sit in the Treasury Dept, Goldman Sachs., Fed Reserve and White House. The senate members play their part of the drama to make people believe they are doing their part for the citizens. The next President should repeat Putin's actions of rounding up all the executives and puting them in the prison. He should then overhaul the financial system and corporatocracy in the country. That should be the way to go.

Posted by: Thomas | October 7, 2008 10:29 AM

my question is, "will he be prosecuted or does he get away with this absurdity?"

Posted by: dawna | October 7, 2008 11:34 AM

it's high time to dust off the books on eminent domain law -- for the greater good, Fuld and his ilk
shall forfeit their personal property.
His private jets, his vacation homes around the world... I'm sure all of it was sheltered from tax as somehow 'business expenses' ... well so be it...
any of it that has ever been classified as part of his business shall be impounded. Just like when they impound property used for any other criminal activities.

Posted by: Anonymous | October 7, 2008 2:08 PM


Isn't it time the system went in for some much needed repair?

Due diligence and oversight long ago slid out the window. No one was watching.

Time to do something about it.

Here's a huge one they all missed.... The dramatic change that swept through all of North America's boardrooms over the past 30 years. It is one of the underlying causes of the headache the economy is now feeling, but more importantly, it has resulted in the general feeling of "disconnect" by most Americans.


Posted by: PacificGatePost | October 7, 2008 3:08 PM

Just saw Sam Zell blame the current crisis on mark to market accounting....I personally believe it was a conspiracy by the colour blue..

Posted by: Andrew Gallagher (monaco) | October 8, 2008 5:09 PM

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