Dick Fuld (ex-CEO Lehman): I did not even hear about Repo 105 until a year after bankruptcy

Yet again, another richly rewarded CEO was unaware of specifics and generally clueless.

Wall Street Journal (Michael Crittenden)
"Let me start by saying that I have absolutely no recollection whatsoever of hearing anything about Repo 105 transactions while I was CEO of Lehman," Mr. Fuld said in prepared testimony for a Tuesday hearing before the House Financial Services Committee.

Mr. Fuld pushed back on criticisms of Lehman included in a bankruptcy examiner's report and company suggested the document "distorted the relevant facts." He said Lehman complied with accepted accounting rules and that the firm's bankruptcy wasn't caused by the so-called Repo 105 deals—the name given to a type of agreement that had the short-term effect of appearing to reduce Lehman's assets and leverage, according to the examiner's report.

"Lehman should not be criticized for complying with the applicable accounting standards," Mr. Fuld said, saying the firm and its employees "have been unfairly vilified."

He also suggested that federal regulators at the Securities and Exchange Commission and Federal Reserve Bank of New York had access to the bank's daily activities up until its collapse.

"I am not aware that any data was ever withheld from them, or that either of them ever asked for any information that was not properly provided," Mr. Fuld said.

Other comments from his written testimony:
Since September of 2008, I have given much thought to the financial crisis and the perfect storm of events that forced Lehman into bankruptcy.

Let me start by saying that I have absolutely no recollection whatsoever of hearing anything about Repo 105 transactions while I was CEO of Lehman. Nor do I have any recollection of seeing documents that related to Repo 105 transactions. The first time I recall ever hearing the term “Repo 105” was a year after the bankruptcy filing, in connection with questions raised by the Examiner.

As CEO, I oversaw a global organization of more than 28,000 people with hundreds of business lines and products and with operations in more than forty countries spread over five continents. My responsibility as the CEO was to create an infrastructure of people, systems and processes, all designed to ensure that the firm’s business was properly conducted in compliance with the applicable standards, rules and regulations.






We feel your pain Mr. Fuld as today's testimony must have been a truly humbling experience for someone who raked in $484 million in salary and stock options over an 8 year period. Nice job bringing up overseeing of 28,000 people over 5 continents, as it almost brought a tear to my eye.  You may very well have saved the equity market today given your sincerity. We wish you well and thanks for clarifying the whole Repo 105 thing.