A lot of people blame Dick Fuld for the fall of Lehman Brothers, and would like to let him know as much, should he ever emerge from his hermetically sealed bunker. Many also believe the unceremoniously fired Erin Callan and Joseph Gregory were fall girls and guys thrown in under a bus for reasons no more substantive than being too sexy and too hideous dressers, respectively. This latest news gives us pause before endorsing that theory.
On Friday, September 12, the Wall Street Journal reported that Lehman's former president, Joe Gregory, who was demoted along with former CFO Erin Callan in a management shake-up in June, was listing his Bridgehampton house on Surfside Drive for $32.5 million. The collapse of Lehman's stock is a blow to Gregory's lifestyle. He reportedly used to travel by helicopter to midtown from his $3.5 million mansion in Huntington, which was recently renovated, according to a Sotheby's broker. According to one source, Gregory's financial adviser was in negotiations with Lehman's attorneys at Simpson Thacher & Bartlett, working to avert his filing for bankruptcy, after he borrowed money against his Lehman stock to pay for the renovation. "He owes a lot of money for it. They called the margin loan" late last week, the source said.
The Rage Of The Previously Rich [NYMag]
Posted by guest , Sep 22, 2008 11:34AM
I hear "The Donald" is in line to save Joey, much like he did for Ed McMahon.
Full Stop.
Posted by guest , Sep 22, 2008 11:35AM
Dick Fuld to the rescue?
Posted by mj , Sep 22, 2008 11:35AM
Shocked this is the first incedent like this we've seen. So many of these execs own restricted stock but choose to margin it and live like they're sitting on the cash value instead. There will be more of these...
Posted by guest , Sep 22, 2008 11:39AM
Did he try a refi at Countrywide?
Posted by guest , Sep 22, 2008 11:40AM
I lost my likely bonus for this year this morning on my way to get some "street breakfast".
I found a quarter stuck under my shoe, I recouped my loss....
Full stop.
Posted by Anal_yst , Sep 22, 2008 11:41AM
Friends of Angelo?
Posted by guest , Sep 22, 2008 11:41AM
HA!!! Nice job Joe. You get what you deserve, now if only we can figure out how to whack Jimmy Cayne and Fulds portfolio down, we'll be in business
Posted by guest , Sep 22, 2008 11:42AM
What a dick. I hope he goes to Federal Pound Me in the Ass Prison.
Posted by guest , Sep 22, 2008 11:42AM
Enough with LEHMAN already-or should i say Enough with LEHMQ.PK -
Posted by guest , Sep 22, 2008 11:44AM
@9-- there's been one thing on leh. calm yourself.
Posted by guest , Sep 22, 2008 11:44AM
Countrywide sells refried beans?
Posted by guest , Sep 22, 2008 11:45AM
Please - DB - do some journalism and find Dick for comment
Posted by guest , Sep 22, 2008 11:47AM
A $32.5 million dollar house must have a heck of an electric bill.
Posted by guest , Sep 22, 2008 11:48AM
How about we just whack Cayne and Fuld? This is New York after all, damnit.
Posted by guest , Sep 22, 2008 11:49AM
13 Maybe not. Could simply have some oceanfront footage.
Posted by guest , Sep 22, 2008 11:50AM
Suck my Fuld Dick, Joe
Posted by guest , Sep 22, 2008 11:53AM
Borrowing against his restricted stock? If he was smart it was a much more complex transaction with the borrowings only part of the story and the rest an options overlay that resulted in greater diversification. Not that holding the S&P500 has been great lately, but certainly better than a totally concentrated position in LEH.
Posted by guest , Sep 22, 2008 12:05PM
@17 - the S&P 500 was down a point last week. That's not bad.
Posted by guest , Sep 22, 2008 12:09PM
One of the Swiss banks (won't name which one, but the worse performing of the two) did these loan deals for a few Fortune 500 CEOs and CFOs. Also helping them hedge their restricted stocks by selling them cheap puts.
How else did you think they got investment banking mandates from these Fortune 500 companies?
Posted by guest , Sep 22, 2008 12:23PM
I believe that Lehman allowed execs to buy puts on their LEH restricted stock, so why would he care about the LEH bankruptcy? Wouldn't that be a problem for whoever sold him those puts?
Posted by guest , Sep 22, 2008 12:25PM
@20 he cares about HIS bankruptcy, not LEH's. "to avert his filing for bankruptcy"
Posted by guest , Sep 22, 2008 12:26PM
@20 - Did Gregory buy the puts from You & Us Bank?
Posted by guest , Sep 22, 2008 12:29PM
20/21/22 Boys, boys, lets take it slow: if he had puts, rather then LEH restricted stock, why is he bankrupt?
Posted by guest , Sep 22, 2008 12:30PM
@23- who knows? but i believe he's reckless enough with money for it to happen.
Posted by guest , Sep 22, 2008 12:34PM
I'm confused.Does Joey have two homes on LI? One in Huntington and another in Bridgehampton?
Posted by guest , Sep 22, 2008 12:35PM
Why would your 5-day/week house be $3.5 mil (not a lot in these parts) and your 2-day/week house be $32.5 mil? Wouldn't you want to live nicer the majority of the time?
Posted by guest , Sep 22, 2008 12:37PM
26 This is easy. The BH one is prob on the ocean. The Huntington one isn't. But its hard to find a place on the ocean that's commuting distance. As far as the houses themselves, probably similar. Location, location. With ocean being a zinger when it comes to location.
Posted by guest , Sep 22, 2008 12:38PM
I doubt he had hedged his restricted stock with a third party. Knowing some of these Lehman types, he probably did it with Lehman's. Now that Lehman is FUBAR, Gregory is going down too. Logical?
I once saw a bunch of MD's and ED's using the firm's forex desk to buy pound sterling at ridiculously cheap rates (pound sterling spot was going through the roof) so they could get themselves a good deal. They effectively cheated on the firm.
Posted by guest , Sep 22, 2008 12:40PM
28 That goes on all the time when someones wife has to pay for a few antiques she bought in London, but was it done in size?
Posted by guest , Sep 22, 2008 12:51PM
#29 It was about 6.50mil pounds all up, can't remember how many trades they spreaded them into.
Most of that group have left the firm, I replaced one of the ED's. So hush............
Silentium est Aurum
Posted by guest , Sep 22, 2008 12:57PM
@30
self call
Posted by guest , Sep 22, 2008 12:57PM
This is the selfsame guy who gave his wife $50 million+ in a divorce settlement over 15 years ago? What did she invest in - couldn't she help a former husband-brother out?
Never enough news on Lb. Please let everyone know how many Barclays winds up picking up. I have a feeling it will be a lot fewer than the 9,000 they are currently talking up.
Posted by guest , Sep 22, 2008 1:11PM
@31
Not really a self call.
To give you an idea, if I quitted with my then bosses in early 2007, I'd be taking away more than I'd earn as an ED this year, the next, and probably the year after that.
Life will be hard for many of us in the coming years.
Back to my spreadsheet...........
Posted by guest , Sep 22, 2008 1:33PM
Thirtium est retardedium.
Posted by guest , Sep 22, 2008 2:09PM
Thirtifortium takes it in the sophoclesium
Posted by guest , Sep 22, 2008 2:11PM
@33... so you basically don't care if you get called-out, you dumbass? I wonder if anyone knows you here, Ms. --- ...
Posted by guest , Sep 22, 2008 3:19PM
35, that doesn't make any sense.
yours truly,
34.