Is Fuld the next loser of the corporate crime lottery?

I’ve been saying that the Enronesque criminal prosecutions of meltdown figures is probably looming, beginning with Lehman’s Fuld, though this would be a mistake. This NY Mag article brings Fuld’s prosecution closer. Here's Carney's summary:

The article makes clear that while Lehman Brothers chief executive Dick Fuld was using his powers of intimidation and influence with the Treasury Department to quiet “rumor mongers,” he was running a firm in a financial condition that was even worse than critics suspected. Even while he and his deputies sought to assure investors and counterparties that all was well aboard the good ship Lehman, the firm’s own executives were discovering that the balance sheet told a very different tale.

The criminal laws will hit those who lied (maybe Fuld) and not those who merely screwed up (e.g., Bob Rubin). It’s the sort of distinction we're used to with the corporate crime lottery. I'm not comfortable with putting anybody in jail for this type of mistake.

Comments

[Marjie Wertz]

Prior to the fall of Bear Stearns, most press accounts as well as internal documents by institutional analysts on Wall Street portrayed Fuld and Lehman as a cut above, that they had not taken on as much of the mortgage backed derivative securitization risk as the other firms and therefore should be less affected by others "malfeasance." One article quoted Fuld saying that he had little understanding of those products and that was why he was late to the party. The article went on to indicate what a tight hands on approach Fuld exhibited, certainly not emulated by Price at Citi among others.

The nuts and bolts stats research kept highlighting Lehman as head and shoulders above its peers even though the market was discounting its bonds and preferred stock. These analysts started to indicate who would be survivors and Lehman was given a repeated carte blanc.

When Bear Stearns went down that one weekend as narrated in Vanity Fair, the context changed. Whether that take out was justified or not, at least there was a prelude to their demise. Within ten days,
it got very thick and ugly for Lehman as anyone knows who paid half attention.

The very obvious discrepancy between what was portrayed as "information" about Lehman and Fuld before the Bear weekend and the subsequent information that began to turn shades of purple,depending on the time of day, would need much investigation if criminal charges could be brought and successfully prosecuted.