This probably won’t come as a surprise. But some of the major culprits in the financial crash — former CEOs or top execs at banks whose billion-dollar losses helped precipitate the turmoil — don’t seem to be paying much of a price for their catastrophic mismangement.
Dick Fuld, the former CEO of Lehman — whose collapse in September directly ushered in the broader panic — is already plotting a comeback. According to the Financial Times, he’s thinking about starting a “small advisory boutique to help companies with strategic and financial issues.” The venture would “harness [Fuld’s] contacts in US companies,” says the paper.
Meanwhile, two former Wall Street honchos appear to be living the high-life after seeing taxpayers step in to rescue their troubled firms.
The New York Post reports today that Peter Kraus, a former top executive with Merrill Lynch, just bought a $37 million Park Avenue apartment — “featuring 11-foot-high ceilings, three fireplaces, three maid’s rooms, a library, a gallery and a family room/gym.” In September, Kraus got a $25 million golden parachute from Merrill when it was sold to Bank of America, even though he had only started work there that month. B of A received $25 billion in taxpayer money as part of the bailout.
And back in March, Jimmy Cayne, the ousted CEO of Bear Stearns, bought two adjacent apartments at the Plaza, perhaps New York’s swankiest locale, worth $28.24 million. That same month, his collapsed former firm was bought by JP Morgan Chase, with major government backing. Cayne reportedly spent much of his time playing golf and bridge while Bear Stearns was reeling last year.
Next to these characters, the case of Ken Thompson, the former Wachovia CEO, may appear minor. But Thompson, who was forced out of Wachovia after the bank posted a $708 million loss in the first quarter of this year, nonetheless seems to have held onto some of his reputation as a member in good standing of the business elite: he remains on the board of Hewlett Packard. Wachovia has since been taken over by Wells Fargo.
And even Daniel Mudd, the former head of mortgage giant Fannie Mae — now controlled by the US government — still seems to have bright career prospects. The Financial Times has reported that he frequently travels to New York City for job interviews.
Bernard Madoff, there’s hope for you yet!
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