Terrorists Among Us

Americans are in danger. There are terrorists among us. These sociopaths have no conscience, they don't care about the consequences of their actions—lives torn apart, families destroyed. These terrorists are sick, they are capable of any destructive act, no matter how despicable. To save ourselves, we need to seek them out where they live, roust them out, and put them behind bars where they belong. And as we've recently been reminded, they can be anywhere—your next door neighbor could be one.

One of these terrorists can be found in Greenwich, Connecticut (or Cornwall, Vermont, or Jupiter, Florida, or Sun Valley, Idaho). His name is Richard "Dick" Fuld, and he was the CEO of Lehman Brothers before it went belly-up.

You didn't think I was talking about Jihad Jane, did you?

Barry Ritholtz notes that the bankruptcy report on Lehman is now out. A few of his remarks are worth repeating here.

• Major accounting firms are worthless to investors. They were either unable or unwilling to detect fraud amounting to 50 billion dollars. The incompetents at Ernst & Young deserve the same fiery death as Arthur Anderson; Whether they are hired guns or paid whores, they—like the rating agencies—are worthless to investors.

• Corporate management engages in fraud all too regularly: Am I reading this correctly — that Dick Fuld’s defense will be “I didn’t know that Lehman was a giant Ponzi scheme, and I was unaware we were hiding billions in bad debt and leverage off balance sheet?” Based on the release of the bankruptcy court report, Lehman was technically insolvent perhaps years before it collapsed.

• The SEC is utterly incapable of comprehending how markets function. They believe the criminals who commit the fraud, and  ignore the whistleblowers who uncover it.

• The Media did a terrible job uncovering the fraud as well. Some media folk were used by CEOs. Some of the TV press who relied on access to their subjects, actually rallied to the defense of these CEOs, including Fuld, and trashed the short sellers. Most notably Charlie Gasparino from his CNBC days, but their were others as well.

Etc. Barry concludes—

Pathetic. All in all, the entire system failed. The situation is utterly disgusting, and if the investing public pulls its money out of the completely corrupt public markets for a generation or more, it would not surprise me...

Aren't we entitled to ask why CBS News (and everyone else) is focused on some not-so-secretive wacko in the Philadelphia suburbs whose Grand Plan was to assassinate Swedish cartoonist Lars Vilks while conscienceless financial terrorists like Dick Fuld are still free?