Like a married man being interrogated by his wife for an alleged extramarital affair, Lehman Brothers CEO Dick Fuld sat in front of the House Committee on Oversight and Government Reform today, answering questions concerning his inolvement in the bankruptcy of his 158-year old, now dead firm. For nearly two hours Fuld deflected accusations that he misled investors and profited at the expense of shareholders, holding firmly to the advice given to me by a college roommate with questionable ethics on what to do if a significant other ever accuses you of cheating: Deny Till You Die.
It was clear that the members of Congress posing question after question, at times trying very hard to trip up the CEO, weren’t buying Dick's innocence. At one point, Henry Waxman, chairman of the committee, said to Fuld, “I don’t accept the fact that you assert the system worked when you lost your stock.” And in closing, he added, “You don’t seem to acknowledge that you did anything wrong.”
One thing seems to be certain: whether or not Fuld will be held accountable will not bring back the lost severance of numerous Lehman employees whose units fell under the bankruptcy, or the value of the shares held by Lehman's investors.
While Fuld was testifying, the stock market was imploding on news that overseas’ governments had been forced to jump into the bailout game, but thanks to a late rally the Dow only finished down 3.8 percent.
And just after the market closed, more news surfaced about the battle over Wachovia, as Citi and Wells Fargo agreed to take a time out of sorts: all parties involved have temporarily suspended their fight in court in what seems to be a way to allow an agreement to be made without the law involved (earlier today Citi filed a $60 billion lawsuit against Wells Fargo, claiming that it had shaken on a deal with the Charlotte-based bank before Wells made its offer). So, it appears that Citi could get Wachovia’s consumer banking business after all, with the rest of Wachovia going to Wells Fargo. The time out lasts until Wednesday, so stay tuned for round four of that dramatic fight. In the meantime, here's a tale of the tape, showing how Citi stacks up against Wells Fargo:Headquarters
C: New York
WF: San Francisco
C: Citi Never Sleeps
WF: The Next Stage
C: $2.1 trillion
WF: $609 billion
C: $95 billion
WF: $111 billion
2007 Net Income
C: $3.617 billion
WF: $8.057 billion
2007 Net Profit Margin
2nd Quarter 2008 Net Income
C: $-2.5 billion
WF: $1.75 billion
2nd Quarter 2008 Net Profit Margin
WF: 15.3 %
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