120 demanding that top Lehman managers forgo bonuses: Vale, Walker, and Fuld’s e-mail string is available under “Lehman Brothers Email Regarding Suspending Executive Compensation,” House Oversight and Government Reform Committee’s investigation, http://oversight.house.gov/story.asp?ID=2208.
121 Few seemed to flaunt their personal wealth as much as he did: Michael Shnayerson, “Profiles in Panic,” Vanity Fair, January 2009; Christina S. N. Lewis, “Hot Words in Finance: ‘For Sale,’ ” Wall Street Journal, January 16, 2009.
122 He gave generously to charities: Shnayerson, “Profiles in Panic,” Vanity Fair; “Spelman Receives $10 Million Gift,” Jet, November 19, 2007.
123 he used it to ram through deals much more quickly: About Walsh, Aby Rosen told the New York Times: “He was fast… . He doesn’t try to kill you or retrade. To be honest, there are very few people in the industry you can say that about.” See Devin Leonard, “How Lehman Brothers Got Its Real Estate Fix,” New York Times, May 3, 2009; Dana Rubinstein, “Mark Walsh, Lehman’s Unluckiest Gambler,” New York Observer, October 1, 2008.
124 her input was virtually niclass="underline" See Nick Mathiason, Heather Connon, and Richard Wachman, “Banking’s Big Question: Why Didn’t Anyone Stop Them?” Observer (London), February 15, 2009.
125 Lehman paid nearly $100 million for Grange Securities: Chris Wright, “Can Lehman Build on Grange?” Euromoney, July 2007.
125 Had there been a sound reason for acquiring Eagle Energy: In 2006, Lehman purchased one third of Eagle Energy and agreed to buy the remaining two thirds a year later. “Lehman Buys Rest of Energy Marketing Co. Eagle Energy,” Reuters, May 9, 2007.
125 deals that did concern him were the ones that Lehman had failed to get: Leonard, “How Lehman Brothers Got Its Real Estate Fix,” New York Times.
126 “I am very disappointed ”: On the morning of June 9, Fuld said: “I am very disappointed in this quarter’s results. Notwithstanding the solid underlying performance of our client franchise, we had our first-ever quarterly loss as a public company. However, with our strengthened balance sheet and the improvement in the financial markets since March, we are well-positioned to serve our clients and execute our strategy.” See “Lehman Brothers Announces Expected Second Quarter Results,” Reuters, June 9, 2008.
126 Lehman’s second-quarter earnings: Susanne Craig and Tom Lauricella, “Big Loss at Lehman Intensifies Crisis Jitters,” Wall Street Journal, June 10, 2008; “Preliminary 2008 Lehman Brothers Holdings Inc. Earnings Conference Call,” June 9, 2008.
126 “Dick Fuld is Lehman”: George Ball, “Lehman’s $2.8B Loss,” Squawk Box, CNBC, June 9, 2008.
126 “Are you saying ‘I told you so’”: Carl Quintanilla, “Lehman’s Q2 Loss,” Squawk Box, CNBC, June 9, 2008.
127 an e-mail to Fuld from Benoît D’Angelin: See “Lehman Brothers Email Regarding Lack of Accountabilit y,” House Oversight and Government Reform Committee’s investigation, http://oversight.house.gov/stor y.asp?ID=2208.
129 So she sent Fuld a two-sentence e-maiclass="underline" Read to the author by a confidential source.
130 Fuld met with the investment bankers for lunch on Wednesday, June 11: Previously referenced by Steve Fishman, “Burning Down His House,” New York, December 8, 2008, as well as Susanne Craig, “Lehman Shuffles 2 Key Jobs in Bid to Restore Confidence—Finance Chief Is Demoted; ‘Wall Street Wants a Head,’ ” Wall Street Journal, June 13, 2008.
133 Gasparino hectoring Lehman’s spokesperson: Dealbreaker.com posted a series of Gasparino’s taped voicemail messages to Kerrie Cohen. “Charlie Gasparino Leaves The Greatest Voicemail(s) of All Time,” September 22, 2008. http://dealbreaker.com/2008/09/charlie-gasparino-leaves-the-g.php.
133 “Our credibility has eroded”: Yalman Onaran, “Lehman Drops Callan, Gregory; McDade Named President,” Bloomberg News, June 12, 2008.
CHAPTER SEVEN
135 “Lehman is not a Bear Stearns situation”: “BlackRock ’s Fink Says Lehman Not Another Bear—CNBC,” Reuters, June 11, 2008.
135 Fleming had helped broker a 2006 deal to merge Merrill’s $539 billion asset-management business: On February 15, 2006, Merrill Lynch agreed to sell its investment managers business to Black Rock in exchange for a 49.8 percent stake in the combined company. “Given its complexity, the transaction was put together quickly, helped by the close friendship that Mr. Fleming, who took Black Rock public at a price of $14, and Mr. Fink enjoy.” Landon Thomas Jr., “On the Menu for Breakfast: $1 Trillion,” New York Times, February 16, 2006.
136 “Everyone is shrinking their balance sheet”: Joseph A. Giannone, “Merrill CEO Wants Ongoing Fed Access, Rules Reform,” Reuters, June 10, 2008.
136 “We all have concerns about what we read in the papers”: Joe Bel Bruno, “Merrill CEO Sees More Industry Consolidation,” Associated Press, June 10, 2008.
137 Merrill’s shares down 32 percent for the year: Tenzin Pema, “Merrill Lynch Outlook Cut at JP Morgan,” Reuters, June 11, 2008.
137 who was sometimes referred to as “I-Robot”: “Stiff, cerebral and intimidating, John Thain is not a ‘people person.’ Behind his back his nickname is ‘I Robot.’ ” See Dominic Rushe, “The IRobot Rides In to Sort Out Merrill Lynch,” Sunday Times (London), November 18, 2007.
137 Fink, ironically, had lead the exchange’s search committee that selected him: Kate Kelly, Greg Ip, and Ianthe Jeanne Dugan, “For NYSE, New CEO Could Be Just the Start,” Wall Street Journal, December 19, 2003.
137 shutting the wood-paneled Luncheon Club and firing the exchange’s barber: Asked about his firing of the NYSE barber, a kindly old man who made $24,000 a year, Thain said: “The barber was a very nice guy who’d been there for a very long time… . [I]t’s difficult to argue that a publicly traded company needs to have its own barber.” Gary Weiss, “The Taming of Merrill Lynch,” Portfolio, May 2008.
137 when he interned at Procter & Gamble: Justin Schack, “The Adventures of Superthain,” Institutional Investor—Americas, June 14, 2006.
138 “When he made conversation”: Lisa Kassenaar and Yalman Onaran, “Merrill’s Repairman,” Bloomberg Markets, February 2008.
138 “Would it hurt you to suck up to me once in a while?”: Ibid.
138 “So, I think you said before that you’re comfortable”: Deutsche Bank analyst Mike Mayo, asked Thain during a conference call. “John A. Thain, Chairman and Chief Executive Officer-Merrill Lynch, to Participate in a Conference Call Hosted by Deutsche Bank on June 11—Final,” Fair Disclosure Wire, June 11, 2008.
138 “At the end of last year when we were looking to”: Ibid.
138 having heard him repeatedly say, “We have plenty of capital”: On March 8, 2008, Thain told France’s Le Figaro: “Today I can say that we will not need additional funds. These problems are behind us. We will not return to the market.” To the Japanese Nikkei Report on April 3, he said: “We have plenty of capital going forward, and we don’t need to come back into the equity market.” At a news conference in Mumbai on May 7: “We have no present intention of raising any more capital.” See Nick A ntonovics, “Merrill CEO Says Won’t Need More Capital,” Reuters, March 8, 2008; “Full Text of Interview with Merrill Lynch CEO John Thain,” Nikkei Report, April 4, 2008; John Satish Kumar, “Credit Crunch: Merrill’s Thain Backs Auction-Rate Securities,” Wall Street Journal, May 8, 2008.