Bruiser of Wall St Dick Fuld looked after his people, but didn’t know when to quit

From The Times
September 16, 2008
Tom Bawden in New York

They called him the Gorilla – the brawler known as the scariest man on Wall Street. In a world where the top brass are generally suave, no wonder Dick Fuld stood apart.

Mr Fuld, 62, joined Lehman Brothers in 1969 after his first career as an air force pilot came to an abrupt halt when he got into a fist fight with a commanding officer. He tough-talked his way to the top and turned a $102 million loss in 1993, the year before he took over as chief executive, into a $4.2 billion profit last year.

Along the way, he made his staff both wealthy and happy: until yesterday, morale at Lehman Brothers was high – even though the immaculately groomed Mr Fuld’s withering looks put paid to the bank’s dress-down Friday tradition.

In that first fist fight, Mr Fuld was said to have been defending a young cadet who was being taunted by the senior officer, and he took that concern for the underdog with him to Wall Street. At Lehman’s he went farther than just about any other financial boss to spread among his staff the wealth created by the business.

This aggressive streak was translated to the office with great effect. Under his stewardship, Lehmans became more and more successful and in 2006, Institutional Investor magazine named Mr Fuld America’s top chief executive. Companies clamoured for his services, and he took positions on everything from the Federal Reserve Bank to the Robin Hood Foundation, a New York antipoverty group.

His activities brought him billionaire status and allowed him to indulge his passion for art collecting. He lives with his wife Kathleen and three children in Greenwich, Connecticut – home to many of Wall Street’s biggest players – and they also have properties on Jupiter Island, Florida, and in Park Avenue, New York.

Some say that the countless accolades encouraged Mr Fuld to take more and bigger risks, in particular piling into high-risk mortgages.

Over the past few months he refused to acknowledge that Lehmans was in difficulty – despite frequent warnings from leading analysts. Had he acted sooner, he would have been able to avoid bankruptcy. A series of interested buyers surfaced in recent months, but Mr Fuld would not sell at the prices offered. By the time he appeared to face up to the situation at the end of last week, it was too late: Lehman was past the point of no return.

Lehman staff say that Mr Fuld is broken and shell-shocked. He has lost a fortune, but for such an ambitious man, the biggest loss is to his pride.