Fuld’s perjury

By Felix Salmon
April 29, 2010
The latest bombshells come from former Lehman lawyer Oliver Budde, who spent many years drafting the bank's compensation disclosures and hiding the restricted stock unit (RSU) component of Fuld's pay. Lehman had to change that after Budde left, but it didn't:

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Dick Fuld said under oath that he was paid less than $310 million from 2000 through 2007, and that he held, rather than sold, the “vast majority” of his shares, if not all of them. But it’s becoming increasingly clear that he was lying. The latest bombshells come from former Lehman lawyer Oliver Budde, who spent many years drafting the bank’s compensation disclosures and hiding the restricted stock unit (RSU) component of Fuld’s pay. Lehman had to change that after Budde left, but it didn’t:

Budde calculated that while Lehman reported Fuld’s RSUs as worth $146 million, the real figure, based on the Section 16 reports, was $409.5 million. Lehman had counted just 2 of 15 RSU awards…

Considering his options, Budde decided to go to the SEC as a whistleblower. He sent a detailed two-page e-mail on April 14, 2008, to the SEC’s Enforcement Division, under the subject line “Possible Material Noncompliance with New Executive Compensation Disclosure Rules.”…

He got a standardized form thanking him for his letter in return. He never heard anything else…

While Fuld said he earned less than $310 million from 2000 through 2007, he actually had received $529.4 million, according to Budde’s calculations.

In direct contradiction to Fuld’s claim to Waxman that he had not sold the majority of his shares, Budde estimates that Fuld earned $469 million from stock sales between 2000 and 2008.

Budde’s numbers are almost identical to the numbers already published by Lucian Bebchuk, so they are credible on their face. And Budde clearly knows what he’s talking about.

It comes down to this: Fuld claimed that he was paid less than $310 million over the years in question, and lost nearly all of it. In fact, according to Budde, he was paid $529 million, and kept $469 million — more than he said he was paid in total.

Fuld’s in a lot of legal jeopardy already, of course. But we’re still waiting for a villain from this crisis to end up in jail. Is there any chance, do you think, that an aggressive attorney general somewhere might launch a criminal prosecution for perjury?

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