Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the FinancialSyst

117 “Basically window dressing”: Report of the Examiner in the Chapter 11 proceedings of Lehman Brothers Holdings by Anton R. Valukas, chairman of Jenner & Block. See: http://lehmanreport.jenner.com/.

117 “I am very aware… . It is another drug we r on”: Report of the Examiner in the Chapter 11 proceedings of Lehman Brothers Holdings by Anton R. Valukas, chairman of Jenner & Block. See: http://lehmanreport.jenner.com/.

117 “not to make any remarks”: Lehman’s five-page severance agreement with Matthew Lee was signed on June 18.

118 bringing in $3.9 billion in revenue: Lehman’s investment banking net revenues rose from $3.2 billion in 2006 to $3.9 billion in 2007, a 24 percent increase, according to the company’s 10-K filing with the Securities and Exchange Commission on January 29, 2008.

120 Over at Neuberger Berman: Lehman sealed its $2.6 billion purchase of Neuberger Berman on October 31, 2003.

120 demanding that top Lehman managers forgo bonuses: Vale, Walker, and Fuld’s e-mail string is available under “Lehman Brothers Email Regarding Suspending Executive Compensation,” House Oversight and Government Reform Committee’s investigation, http://oversight.house.gov/story.asp?ID=2208.

121 Few seemed to flaunt their personal wealth as much as he did: Michael Shnayerson, “Profiles in Panic,” Vanity Fair, January 2009; Christina S. N. Lewis, “Hot Words in Finance: ‘For Sale,’ ” Wall Street Journal, January 16, 2009.

122 He gave generously to charities: Shnayerson, “Profiles in Panic,” Vanity Fair; “Spelman Receives $10 Million Gift,” Jet, November 19, 2007.

123 he used it to ram through deals much more quickly: About Walsh, Aby Rosen told the New York Times: “He was fast… . He doesn’t try to kill you or retrade. To be honest, there are very few people in the industry you can say that about.” See Devin Leonard, “How Lehman Brothers Got Its Real Estate Fix,” New York Times, May 3, 2009; Dana Rubinstein, “Mark Walsh, Lehman’s Unluckiest Gambler,” New York Observer, October 1, 2008.

124 her input was virtually nil: See Nick Mathiason, Heather Connon, and Richard Wachman, “Banking’s Big Question: Why Didn’t Anyone Stop Them?” Observer (London), February 15, 2009.

125 Lehman paid nearly $100 million for Grange Securities: Chris Wright, “Can Lehman Build on Grange?” Euromoney, July 2007.

125 Had there been a sound reason for acquiring Eagle Energy: In 2006, Lehman purchased one third of Eagle Energy and agreed to buy the remaining two thirds a year later. “Lehman Buys Rest of Energy Marketing Co. Eagle Energy,” Reuters, May 9, 2007.

125 deals that did concern him were the ones that Lehman had failed to get: Leonard, “How Lehman Brothers Got Its Real Estate Fix,” New York Times.

126 “I am very disappointed ”: On the morning of June 9, Fuld said: “I am very disappointed in this quarter’s results. Notwithstanding the solid underlying performance of our client franchise, we had our first-ever quarterly loss as a public company. However, with our strengthened balance sheet and the improvement in the financial markets since March, we are well-positioned to serve our clients and execute our strategy.” See “Lehman Brothers Announces Expected Second Quarter Results,” Reuters, June 9, 2008.

126 Lehman’s second-quarter earnings: Susanne Craig and Tom Lauricella, “Big Loss at Lehman Intensifies Crisis Jitters,” Wall Street Journal, June 10, 2008; “Preliminary 2008 Lehman Brothers Holdings Inc. Earnings Conference Call,” June 9, 2008.

126 “Dick Fuld is Lehman”: George Ball, “Lehman’s $2.8B Loss,” Squawk Box, CNBC, June 9, 2008.

126 “Are you saying ‘I told you so’”: Carl Quintanilla, “Lehman’s Q2 Loss,” Squawk Box, CNBC, June 9, 2008.

127 an e-mail to Fuld from Benoit D’Angelin: See “Lehman Brothers Email Regarding Lack of Accountabilit y,” House Oversight and Government Reform Committee’s investigation, http://oversight.house.gov/stor y.asp? ID=2208.

129 So she sent Fuld a two-sentence e-mail: Read to the author by a confidential source.

130 Fuld met with the investment bankers for lunch on Wednesday, June 11: Previously referenced by Steve Fishman, “Burning Down His House,” New York, December 8, 2008, as well as Susanne Craig, “Lehman Shuffles 2 Key Jobs in Bid to Restore Confidence—Finance Chief Is Demoted; ‘Wall Street Wants a Head,’ ” Wall Street Journal, June 13, 2008.

133 Gasparino hectoring Lehman’s spokesperson: Dealbreaker.com posted a series of Gasparino’s taped voicemail messages to Kerrie Cohen. “Charlie Gasparino Leaves The Greatest Voicemail(s) of All Time,” September 22, 2008. http://dealbreaker.com/2008/09/charlie-gasparino-leaves-the-g.php.

133 “Our credibility has eroded”: Yalman Onaran, “Lehman Drops Callan, Gregory; McDade Named President,” Bloomberg News, June 12, 2008.

CHAPTER SEVEN

135 “Lehman is not a Bear Stearns situation”: “BlackRock ’s Fink Says Lehman Not Another Bear—CNBC,” Reuters, June 11, 2008.

135 Fleming had helped broker a 2006 deal to merge Merrill’s $539 billion asset-management business: On February 15, 2006, Merrill Lynch agreed to sell its investment managers business to Black Rock in exchange for a 49.8 percent stake in the combined company. “Given its complexity, the transaction was put together quickly, helped by the close friendship that Mr. Fleming, who took Black Rock public at a price of $14, and Mr. Fink enjoy.” Landon Thomas Jr., “On the Menu for Breakfast: $1 Trillion,” New York Times, February 16, 2006.

136 “Everyone is shrinking their balance sheet”: Joseph A. Giannone, “Merrill CEO Wants Ongoing Fed Access, Rules Reform,” Reuters, June 10, 2008.

136 “We all have concerns about what we read in the papers”: Joe Bel Bruno, “Merrill CEO Sees More Industry Consolidation,” Associated Press, June 10, 2008.