| Congress Faults Lehman’s Leadership |
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| by Tom McGregor | Mon, Oct 6, 2008, 02:07 PM |
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A Congressional committee was told Monday that even as the investment bank Lehman Brothers pleaded for a federal bailout to save it from bankruptcy, it approved millions of dollars in bonuses for its departing executives. The New York Times reports that, “the first Congressional hearings into the causes of the financial crisis began with a portrayal of Lehman Brothers as a firm run by irresponsible leaders who continued to reward executives and spend billions on stock buy-backs and other capital-depleting programs even as internal documents warned about the impending crisis.” Henry A. Waxman, the chairman of the House Oversight and Government Reform Committee criticized the company for showing no accountability for its bankruptcy. The House committee reviewed thousands of documents and pointed out one that was posted four days before the bank filed for bankruptcy protection. Apparently, Lehman’s compensation committee was asked to grant $20 million in “special payments” for three executives who were leaving, and an e-mail exchange recommending a delay in bonus payments was brushed aside. According to the NY Times, “another document showed that executives were warned in a January 2008 meeting that the company was facing liquidity problems. Yet, the firm moved forward with capital outlays, including $5 billion in bonuses, $4 billion in shares and $750,000 in dividend payments between 2007 and the firm’s bankruptcy filing on Sept. 15.” Lehman conducted an internal analysis and found that the company did not move early or fast enough to avoid the crisis; and concluded that the company “lacked discipline” in its financial dealings before filing for bankruptcy. To read the entire article from the New York Times, link here:
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Comments (3)
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written by Old Red , October 06, 2008 Remember the airline bailout of 2001, when the "struggling" airlines were laying off workers and cutting service but still voting in hefty "bonuses" for their board members? Using taxpayer money, no less.
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written by Byron George , October 06, 2008 Hey Red, I agree. How about you and I going to Washington and seeing if Congress will give us a little cash!
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written by Steve Heath , October 07, 2008 The congressional interrogation of Fuld today was pathetic.I watched the replay tonight. With few exceptions, I have never seen such softball questions -of limited value or use - and which make this man at times look sympathetic. Fuld looks like a bad man, he talks like a sleazy bad man. he is a low life piece of slime, whom a good attorney could have ripped apart. That's what happen when the crooks investigate and interrogate their fellow crooks. This Congress is absolutely worthless. Vote them all out! I don't care who their opponent is, or what party they belong to. Write comment
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