Congress Gets Ugly Portrait of Lehman's Last Days

Investment giant knew of liquidity concerns, gave out $5B in bonuses
By Ambreen Ali,  Newser User
Posted Oct 6, 2008 2:04 PM CDT
Richard S. Fuld Jr. arrives to testify before the House Oversight and Government Reform Committee on Capitol Hill today.   (AP Photo)
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(Newser) – Lehman Brothers’ departing executives were negotiating millions in bonuses while the bank begged for taxpayer money to avoid bankruptcy, a House committee finds after reviewing documents. At a hearing today on Capitol Hill—the first on the financial crisis—the investment firm was painted as one run by irresponsible leaders who poured money into risky projects even though internal documents predicted a liquidity crunch, the New York Times reports.

The company admitted that it “lacked discipline” and reacted slowly in an internal analysis, said one lawmaker, adding, “There was no accountability for failure.” Lehman CEO Richard Fuld faced heated questioning on statements that contradicted the crippling economic reality. He admitted he was wrong, in hindsight, but testified that “this financial tsunami is much bigger than any one firm.”