And confiscate his ill-gotten gains along with the gains of the other CEOs who led this country to the brink of financial ruin. Shortly after the implosions of Worldcom and Enron, the Sarbanes-Oxley Act (SOX) was passed. This act created a sweeping set of rules regarding accountability, forcing a clean set of accounting books, under penalty of law. The act is 11 sections law, number 10 reading “the Chief Executive Officer should sign the company tax return.” This is to provide some level of accountability and “the buck stops here” approach. SOX was not optional, but mandatory for all US based public companies.
In June of this year New York Magazine printed an article The Confidence Man about David Einhorn of Greenlight Capital, a hedge fund, and how he started to see problems with Lehman’s accounting back in May. He make this observation from reading the Lehman financial report and comparing it to remarks made by the CFO on a conference call. It took a few months but he was proven to be right on track.
Now it would seem that Dick Fuld’s claim of ignorance is immaterial, as he signed off on Lehman’s filings. The whole point of SOX is accountability, and it’s his signature on the return. A half billion (his last five year’s compensation) here, a half billion there, pretty soon you’re talking real money. Take it back. Take it all back.
Joe