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Paul Friedman Takes Back His Blame of Mismanagement at the Top of Bear Stearns

Paul Friedman, a former senior managing director at Bear Stearns, once famously said "we did this to ourselves. . . . It's our fault for allowing it to get this far, and for not taking any steps to do anything about it." He told William D. Cohan there was "mismanagement at the top" of the firm.

But now, Freidman is taking back his words. "I was interviewed at a time when I was looking for someone to blame," he told the Financial Crisis Inquiry Commission. "I'm sure you’ve read things where I blamed people I’ve never even met. It has bothered me for two years" he said. “I am human.”

It appears that all the former Bear executives have decided to coordinate their stories, blaming the collapse of the firm on fears, unsubstantiated rumors and innuendo. Freidman said there was nothing he could have done to save the firm from this fear-mongering.

"Bear Stearns was the smallest of the major investment banks, and I do not believe that obtaining more long-term secured financing or making any other changes in Bear Stearns' funding strategies would have enabled the firm to overcome these unprecedented market forces or withstand the liquidity crisis that the firm experienced in March 2008," he said in his testimony.

(Read all of the testimony to the FCIC here.)


Only Legacy That Former Bear Stearns Chief Cares About-- His Bridge Playing Legacy-- In Peril

Jimmy Cayne is devastated at the thought of having one of his bridge trophies taken away amid scandal.