When one is running a multi-billion dollar firm, it’s important to have an unwavering, obsessive attention to detail. While Dick Fuld’s focus on Lehman Brothers’ balance sheet admittedly fell by the wayside, there was one thing the Gorilla never stopped harping on: an insistence his top lieutenants had perfect marriages. According to a new book by Vicki Ward, Lehman management tied the success of the bank to how strong its marital partnerships were, with Chris Pettit, a former Fuld deputy, giving a toast at a dinner for the senior executives one night and noting, “Now, look at this! Every single person here is with their original spouse. That is why we are successful. Because our word is our honor. We succeed in business because people can trust us.” It was after this bold proclamation, the logic of which allows us to safely assume that circa September 2008, the majority of LEH brass was on its third and fourth wives and spending the majority of its days locked in Dick Fuld’s office blowing lines out of crack-whore’s ass, that Pettit was pushed out of the firm. Not for fucking up business-wise, of course, but because he cheated on his wife and was subsequently “deserted” by his closest allies because that is something Lehman Brothers don’t do. Determined, for some reason, possibly Asperser’s, that something so horrible could never happen to Team Lehman again, Dick Fuld apparently became even more obsessed with keeping “a watchful eye on his executives’ marriages.” He “openly” hemmed and hawed about chief minion Scott Freidheim being single (which would explain this look of joy when Scotty-boy finally tied the knot at age 43) and became visibly distressed at the “signs of marital discord.”
During the annual Lehman summer retreats at the Fulds’ ranch, in Sun Valley, Idaho, it wasn’t uncommon for him to pull one of his employees aside and ask him questions about his home life. “Are you all having trouble?” he asked Bradley Jack, head of banking and later co–chief operating officer (C.O.O.), after overhearing an argument between Jack and his wife, Karin. “He really wanted to know,” recalls Karin, an attractive blonde, who once ran recruiting on the sales desk at Lehman and married the good-looking, athletic Jack in 1991. “He didn’t think Brad and I looked happy enough. It really worried him.”
Lest he come off as not just some sort of demented yenta, but a hypocritical one at that, Fuld made sure to set the kind of example he wanted his men to follow, which meant being known as the guy who, on trips to Asia, “when others would visit the geisha houses, would always go back to his hotel, and once enraged a big client by refusing to find prostitutes for him after dinner.” Oh, the Fuld’s was a happy, whore-less marriage, if not one marked by bizarre, bro-like epithets (“Colleagues noted that he’d interrupt any meeting to take a call from his wife. To their amusement he called her ‘Fuld.’”)
So, the marital discord: Dick didn’t like it. But the one thing that chapped his hide even more? People dressing like shit, on his watch (“sloppy dress, sloppy thinking,” went Fuld’s motto). Despite making his desire for anyone within spitting distance to be impeccably attired at all times, wouldn’t you know it, some fuckers still didn’t get it through their thick heads. There’s the famous story of Joe Gregory and his “ugly green suit,” of course, but there were so many more occasions in which Fuld was forced to breathe the same air as some shlub, which deeply hurt him on a personal level.
As the years went by, some non-golfers joined the group, and they had no clue about the dress code and didn’t much care. This was a grave mistake—Fuld cared how people looked, both in and out of the office…in the summer of 2006, Roger Nagioff—Lehman’s London-based C.O.O. of Europe, who owns a fleet of cars, including a Ferrari Daytona—arrived in Sun Valley and won the unofficial “worst-dressed prize” for his army cargo pants and black turtleneck sweater. “I don’t play golf, I’m not ashamed of that, and obviously my clothes were far too cool for this group,” says Nagioff. One witness recalls, “Dick didn’t lay off, teasing him mercilessly all weekend.”
Rob Shafir, the co-head of global equities, was similarly clueless about the importance Fuld attached to attire. In 2004, Shafir arrived at the Mark hotel, on Madison Avenue in New York, for a so-called off-site. He was five minutes late (Fuld was a stickler for punctuality), and as he looked around the room he realized he was the only person dressed business casual (oxford shirt, chinos, and no tie). “What?” he asked as he caught everyone’s horrified stares. “It’s an off-site … ” Fuld looked at him. “Rob: off-site, yes. Out of mind, no.”
You know what? Fine. If these jokers wanted to dress like slobs outside the office, there wasn’t much Dick could do about it, other than sighing audibly and acting put out. But within the halls of Lehman it was another story. Or at least it was, until one fateful meeting, the outcome of which can be directly blamed for the ultimate fall of the Brothers.
Lehman was the last of the Wall Street firms to go casual on Fridays. In the late 1990s, Fuld reluctantly called the operating committee together for a vote on whether they wanted it, and to his dismay they all did. He lamented, “I don’t know what this means.” He reinforced the point: “You know what? This democratic bullshit has gone on for long enough.” Joe Gregory chimed in, “Oh, I don’t want this, either, Dick. We are a different generation. We don’t believe in it, but we have to do this for the younger people.” Fuld compromised by letting the firm go casual on Fridays—except for the 10th (executive) floor. As he agreed to it he said, “It is a dark day for the firm.”