The short sellers did it, Richard Fuld, former Lehman Brothers chief executive, said in testimony to a Congressional committee on Monday. In an extraordinary public autopsy into the biggest bankruptcy in US history, Fuld declared he felt “horrible” about Lehman’s collapse but insisted the investment bank was brought down by a crisis of confidence in the marketplace, combined with a wave of naked short selling. By blaming the short sellers, Fuld echoed a fellow victim of the credit crisis earlier this year - Alan Schwartz, former CEO of Bear Stearns, who told a Senate committee in April short sellers had helped create a run on the bank, which sapped its liquidity and eventually saw it bought by JPMorgan Chase. Fuld said what had happened at Lehman could have happened to “any other firm on Wall Street, and almost did”. But Henry Waxman, Democratic chair of the oversight committee holding the hearing, suggested Fuld’s preoccupation with David Einhorn, a hedge fund manager who stated he had a large short position on Lehman stock, caused him to abandon his fiduciary obligation to shareholders.
