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A year after Lehman bankruptcy, few execs resurface

Fuld, Callan, Gregory keep low profiles amid lawsuits, investigations

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By Alistair Barr, MarketWatch

SAN FRANCISCO (MarketWatch) -- A year after the collapse of Lehman Brothers sparked a firestorm in the global markets and threatened a financial meltdown, a few of the Lehman executives at the center of that conflagration are starting to resurface.

Former Chief Legal Officer Thomas Russo has a senior position at a New York law firm, while Jeremy Isaacs, who headed the firm's operations in Europe and Asia, has launched a new investment business. Even ex-Chief Executive Richard Fuld has a new job.

The first anniversary of the firm's collapse revives painful memories for those who have argued the investment bank shouldn't have been allowed to fail when such rivals as Goldman Sachs and Morgan Stanley were saved just days later.

Flash point
The fall of Lehman Brothers

The collapse of Lehman Brothers a year ago sparked a firestorm in the global markets and threatened a financial cataclysm. Even today the question remains, would saving Lehman have made a difference?

From downturn to crisis
The decision to allow Lehman to collapse will be debated in financial history classes for decades to come, writes David Callaway.
Video: Should Lehman be saved?  

Lehman execs: Where are they now?

What's 'normal'?
You don't hear money-market terms such as Libor and the TED spread being thrown around on evening newscasts these days. That's good.
Money-market funds: The day the buck broke
See the full special report
/conga/story/2009/09/lehman.html 27472

Many top Lehman executives, including ex-Chief Financial Officer Erin Callan and former Chief Operating Officer Joseph Gregory, are still keeping low profiles amid lawsuits and regulatory investigations into the failure.

One former Lehman employee who didn't want to be identified said the bankruptcy was very painful for all of the firm's staff, and many just want to put the collapse behind them.

"I feel horrible," Fuld told Congress in October, less than a month after the bankruptcy. "What has happened is an absolute tragedy."

Lehman asked the Federal Reserve for help, but it didn't get much, Fuld said. But days after the firm filed for bankruptcy, on Sept. 15, the Fed and other regulators rushed to save Goldman /zigman2/quotes/209237603/composite GS -1.76% and Morgan Stanley /zigman2/quotes/209104354/composite MS -0.38% by granting them many of the things that Lehman hadn't gotten, he argued.

Lehman asked the Fed to let it become a bank holding company, which could have given the firm more access to deposits, considered a more stable source of funding.

Lehman also asked the Fed to broaden the types of collateral that could be used to tap the Term Securities Lending Facility, one of the main programs used by the government to boost liquidity during the financial crisis.

On the day Lehman prepared to file for bankruptcy protection from creditors, the Fed "significantly" relaxed those collateral requirements, Fuld recalled. "Had these changes been made sooner, they would have been extraordinarily helpful to Lehman."

As Goldman and Morgan Stanley shares slumped in the wake of Lehman's collapse, the Securities and Exchange Commission banned short sales, or negative bets, against roughly 800 of the largest financial-services stocks -- four days after the bankruptcy filing.

A few days after that, the Fed allowed Goldman and Morgan Stanley to become bank holding companies. See full story.


Most former Lehman executives are still keeping out of the limelight.

The Justice Department subpoenaed at least a dozen Lehman executives, including Fuld, Callan, Gregory and Ian Lowitt, a former co-chief administration officer at the firm, according to a Wall Street Journal report last October. Justice Department spokesman Charles Miller declined to comment, and the Journal noted that it's not clear which executives are targets of the investigation or witnesses.

Richard Fuld, Chairman and CEO of Lehman Brothers Holdings, testifying at a House Oversight and Government Reform Committee hearing on the causes and effects of the Lehman Brothers bankruptcy, in Washington, Oct. 6, 2008.

In March, New Jersey's attorney general sued nine former Lehman executives, including Fuld, Callan, Gregory, Lowitt, Thomas Russo and Bart McDade, former president and chief operating officer of the firm.

New Jersey Gov. Jon Corzine, a former CEO of Goldman, said Lehman executives should be held accountable for "fraud and misrepresentation" that left his state's pension funds with more than $100 million in losses.


Fuld recently started Matrix Advisors LLC in an office at 780 3rd Ave. in New York, a building that also is home to Paulson Investment Co. Inc. , Renaissance Capital, Itar-Tass News Agency and offices of Sen. Kirsten Gillibrand.

It's not clear what Matrix does. A representative at the office said she would pass a late-August message seeking comment on to Fuld. Patricia Hynes, Fuld's lawyer, didn't respond to an email.

An executive at Renaissance Capital said he'd heard that Fuld operates from the building but hadn't seen him. The executive added that if someone had seen Fuld, he thinks they would have mentioned it.

On leave

Callan started at Credit Suisse in September 2008, running a hedge-fund advisory group. Callan advised hedge funds at Lehman before she took on the CFO position there in late 2007. At Credit Suisse, she coordinates departments to make sure that they are working well together to service hedge-fund clients.

In February, Callan took a leave of absence from Credit Suisse. A spokeswoman for the investment bank said on Aug. 20 that Callan was still on leave, adding that she didn't know why the former Lehman CFO was away from work. The spokeswoman also confirmed that Callan was still an employee of Credit Suisse.

Erin Callan

Steven Eckhaus, Callan's lawyer, didn't return an email seeking comment.

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