With only $1 billion left in cash by the end of that week, Lehman was quickly running out of time. Last-ditch efforts over the weekend of September 13 between Lehman, Barclays PLC and Bank of America, aimed at facilitating atakeoverof Lehman, were unsuccessful. On Monday September 15, Lehman declared bankruptcy, resulting in the stock plunging 93% from its previous close on September 12.Controversy of executive pay during crisis[edit]Richard Fuld, head of Lehman Brothers, faced questioning from theU.S. House of Representatives'Committee on Oversight and Government Reform. Rep.Henry Waxman(D-CA) asked: "Your company is now bankrupt, our economy is in crisis, but you get to keep $480 million (276 million). I have a very basic question for you, is this fair?"[49]Fuld said that he had in fact taken about $300 million (173 million) in pay and bonuses over the past eight years.[49]Despite Fuld's defense on his high pay, Lehman Brothers executive pay was reported to have increased significantly before filing for bankruptcy.[50]On October 17, 2008,CNBCreported that several Lehman executives, including Richard Fuld, have been subpoenaed in a case relating to securities fraud.[51]Too Little, Too LateHowever, these measures were perceived as being too little, too late. Over the summer, Lehman's management made unsuccessful overtures to a number of potential partners. The stock plunged 77% in the first week of September 2008, amid plummeting equity markets worldwide, as investors questioned CEO Richard Fuld's plan to keep the firm independent by selling part of its asset management unit and spinning off commercial real estate assets. Hopes that the Korea Development Bank would take a stake in Lehman were dashed on September 9, as the state-owned South Korean bank put talks on hold.Fuld was nicknamed the "Gorilla" on Wall Street for his competitiveness.[6]Cond Nast Portfolioranked Fuld number one on theirWorst American CEOs of All Timelist, stating he was "belligerent and unrepentant".[7]Fuld was also named inTimemagazine's list of "25 People to Blame for the Financial Crisis".[8]Fuld worked for Lehman for nearly 40 years. During this time, Fuld witnessed and participated in the numerous changes which the organization endured, including its merger withKuhn, Loeb & Co, its acquisition byAmerican Express, its merger withE.F. Hutton, and its ultimate spin-off from American Express in 1994, once again as Lehman Brothers.In 2006,Institutional Investormagazine named Fuld America's top chief executive in the private sector. That same year in December, Fuld toldThe Wall Street Journal, "as long as I am alive this firm will never be sold." In March 2008, Fuld appeared inBarron'slist of the 30 best CEOs and was dubbed "Mr. Wall Street".Overall, Fuld received nearly half a billion dollars in total compensation from 1993 to 2007.[18]In 2007, he was paid a total of $22,030,534, which included a base salary of $750,000, a cash bonus of $4,250,000, and stock grants of $16,877,365.[19]According toBloomberg Businessweek, Fuld "famously demanded loyalty of everyone around him and demonstrated his own by keeping much of his wealth tied up in the firm", even buying Lehman shares on margin, according to a friend.[20]Bankruptcy and aftermath[edit]See also:Bankruptcy of Lehman BrothersFuld was initially praised for handling the initialsubprime mortgage crisiswell, better than any of the otherbulge bracketfirms, behindGoldman Sachs.[21]Fuld was said to have underestimated the downturn in the US housing market and its effect on Lehman's mortgage bond underwriting business.[6]Fuld was already the longest tenured CEO on Wall Street and kept his job as the subprime mortgage crisis took hold, while CEOs of rivals likeBear Stearns,Merrill Lynch, andCitigroupwere forced to resign.[6]In addition, Lehman's board of directors, which includes retired CEOs likeVodafone's Christopher Gent andIBM'sJohn Akerswere reluctant to challenge Fuld as the firm's share price spiraled lower.[6]Fuld would be criticized for not completing several proposed deals, either a capital injection or a merger, that would have saved Lehman Brothers from bankruptcy. Interested parties had includedWarren Buffett[22]and theKorea Development Bank.[23]Fuld was said to have played a game of brinkmanship, refusing to accept offers that could have rescued the firm because they didn't reflect the value he saw in the bank.[6]However,New Yorkmagazine had a different view on Fuld's last three months as CEO before the firm's bankruptcy.Hugh "Skip" McGee III, then-head of the Investment Banking Division, had earlier disagreed with COO Joseph M. Gregory's appointment of one of his subordinates, Erin Callan, as CFO. On June 11, 2008, McGee organized a meeting of the firm's senior bankers, who forced Fuld to demote Callan and Gregory. Gregory's replacement as president and COO wasBart McDade. While Fuld remained CEO in title, it has been said that a management coup had taken place and that the one guy in charge was now McDade.[24]New Yorkmagazine's account also stated that Fuld was desperately searching for a buyer during the summer and even offering to step aside as CEO to facilitate the sale of the firm, being quoted as saying "We have two priorities, that the Lehman name and brand survive and that as many employees as possible be saved, and you'll notice our priority isnt price".[25]In his 2009 bookA Colossal Failure Of Common Sense, Larry McDonald - a senior Lehman Brothers trader in the years leading up to the crash wrote that Fuld's "smoldering envy" ofGoldman Sachsand other Wall Street rivals led him to ignore warnings from Lehman executives about the impending crash, and that Fuld insisted the firm's chief risk officer left the boardroom during key discussions.[26]In October 2008, Fuld was among twelveLehman Brothersexecutives who receivedgrand jurysubpoenasin connection to three criminal investigations led by theUnited States Attorney's offices in the Eastern and SouthernDistrictsof New York as well as the District of New Jersey, related to the alleged securities fraud associated with the collapse of the firm.[27][28][29]On October 6, 2008, Fuld testified before theUnited States House Committee on Oversight and Government Reformregarding the causes and effects of the bankruptcy of Lehman Brothers.[30][31][32]During the testimony, Fuld was asked if he wondered why Lehman Brothers was the only firm that was allowed to fail, to which he responded: "Until the day they put me in the ground, I will wonder."Soon after Lehman filed for bankruptcy, there was a well circulated rumor promulgated initially by the satirical financial blog "Dealbreaker" and overly excited reporters that Fuld was "punched in the face" and/or "knocked out cold" by someone while working out in the company gym. According to the man who was gym manager at the time, this never happened.[33]After Lehman[edit]On November 10, 2008, Fuld transferred his Florida mansion to his wife Kathleen for $100. They had bought it four years earlier for $13.75million.[34]In late March 2009, Fuld had an email sent out stating that he joined Matrix Advisors, a New York-basedhedge fund.[35]In May 2010, Fuld was registered by theFinancial Industry Regulatory Authority(FINRA) as employed by Legend Securities, a securities brokerage and investment banking firm in New York.[36][37]Fuld left the firm in early 2012.[38]Accolades and directorships[edit]In 2006, Fuld was named No. 1 CEO in the Brokers & Asset Managers category, byInstitutional Investormagazine.[39]In 2007 he received a $22million bonus.[40]Fuld at one time served on the board of directors of theFederal Reserve Bank of New York, a position he ceased holding shortly before the bankruptcy of Lehman Brothers. He is a member of the International Business Council of theWorld Economic Forumand the Business Council. He also serves on the Board of Trustees ofNew York-Presbyterian Hospital. He was also on the board of directors of theRobin Hood Foundationbut was removed from the Board following the Lehman Brothers bankruptcy.[41]In December 2008, Fuld was given the "Lex Overpaid CEO" award of theFinancial Timesfor having received $34million in 2007 and $40.5million in 2006, the last two years before his bank's failure.[42]

Fuld is an exception. After the bankruptcy, he stayed on to help Alvarez & Marsal, the advisory firm in charge of sorting out the mess. Then he struck out on his own. In 2009 he founded Matrix Advisors, a consulting firm for mergers and acquisitions. In a regulatory filing, Fuld reported that he works more than 60 hours a week there. He renewed his securities license through a small broker-dealer, Legend Securities, run by a friend, and even underwent a medical exam for his student pilots certificate. Famously driven, Fuld gave every sign that he meant to put the Lehman nightmare behind him.But the way in which these encounters are invariably describedwith slight disbelief, as if someone had spotted a unicornunderscores how far removed Fuld is from his former glory. It isnt that hes pitied or despised, a former colleague explains. His name simply doesnt come up.Those still in contact with him say Fuld holds no illusion of a public redemption. I will never heal from this, he told the staff of Spring Hill at a lunch a few weeks after the bankruptcy. Lehmans fall was particularly painful, friends say, because Fuld sees himself as having adhered to a code of honor1during the 15 years he was building Lehman from an unwantedAmerican Express(AXP)castoff into a major Wall Street player. He famously demanded loyalty of everyone around him and demonstrated his own by keeping much of his wealth tied up in the firmhe even bought Lehman shares on margin, says a friend. That money vanished in the crash. Friends say Fuld, whose net worth once exceeded $1 billion, may have lost that much. Meanwhile, the legal morass he left in his wake is closing in on himand threatens to wipe out whatever dignity and wealth he may have left.For all that hes tried, Fuld cant seem to escape the reach of the past. Although many of his peers also made disastrous decisions, no one on Wall Street has paid a steeper price in reputation and personal fortune. This owes partly to Fulds hubris, brutish manner, and aggressivenesswhich earned him the nickname the Gorillabut also, his handful of defenders insist, to circumstances and twists of fate beyond his control. As Brad Hintz, a former Lehman chief financial officer, says, Hes the great Greek tragedy of the crisis.Wall Street may have turned its back on Fuld, but theres one place where he remains a subject of vital interest. Management theorists have seized on his tenure at Lehman as an illustration of how executives can go awry. The latest issue of theJournal of Management Inquirycontains a long study by British academic Mark Stein titledWhen Does Narcissistic Leadership Become Problematic? Dick Fuld at Lehman Brothers.