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Fuld's Folly

Lehman Brothers CEO Richard Fuld had plenty of chances to save his firm, but missed them all. For that reason, Cramer added him to the Wall of Shame.

Fuld, who replaces Washington Mutual’s former CEO Kerry Killinger, never found the buyer so desperately needed to save Lehman. The deal with Korea Development Bank looks like it’s falling through. HSBC or a Chinese bank might have made a good suitor. So, too, would Japan’s Nomura or China’s CITIC. Wealth funds in Qatar or Abu Dhabi would have helped. But Fuld never made it happen.

Fuld never even found a buyer for its attractive asset-management group Neuberger Berman. Nor did he spin off Lehman’s bad debt when he could have. And he missed his chance to issue shares when the stock ran after the Securities and Exchange Commission finally decided to enforce the naked short-selling rule. Well, now the SEC is ignoring the practice again, and Lehman is getting hit hard. So much so the company’s stock price is so low – $7.79, yesterday's close was $14.15 – Lehman couldn’t raise cash if it wanted to.

Cramer’s thinking we could have a repeat of a Bear Stearns takeunder. Washington guarantees Lehman’s bad loans while the buyer gains a big piece of market share.

But Mr. Fuld isn’t alone. Citigroup CEO Vikrim Pandit and AIG CEO Robert Willumstad both missed their chance to capitalize on the Fannie-Freddie deal. Now these stocks are just as vulnerable as Lehman to naked short selling. So if these two CEOs don’t move now to save their companies, Cramer’s going to put them on the Wall of Shame, too.



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