Lehman head Dick Fuld has been personally named as an individual defendant in a suit brought by a Lehman preferred investors, or so says Reuters. Fogel Capital Management is trying to turn the matter into a class action suit to boot. Uh oh.
The lawsuit contends that the prospectus issued ahead of the offering was false and misleading because it did not reveal Lehman's significant exposure to the subprime mortgage market, and also did not disclose that Lehman was in desperate need of capital because of deteriorating market conditions and rapidly falling values of its assets.
Like anyone reads those "risk factor" sections anyhow.
We love a good round of "What did the Chairman know and when did he know it?" as much as the next financial tabloid. In this case, its fortunate that Dick's wife is an aspiring artist since he sold his own equity stake to fund the recent purchase of two Happy MealsTM with the WALL-E action figure toy.
Let me tell you, a more piteous figure than that cast by Dick Fuld, with down-turned gaze mournfully counting off the last few pieces of silver in his hand before declining to take the cashier up on her "Wanna Super-Size 'dat?" offer, I have not heretofore encountered.
Investor in Lehman preferred stock sues for fraud [Reuters]