Corporate Law

U.S. Lawmaker Suggests Special Counsel Probe of Wall Street Operations

  • Print

At least one congressional lawmaker is calling for the appointment of a special counsel to probe Wall Street’s operations, as a global financial crisis apparently sparked by the U.S. mortgage meltdown continued today.

As stock prices plummeted again worldwide today and the House Oversight and Government Reform Committee began hearings this morning on the causes and effects of the Lehman Brothers bankruptcy, Rep. John Mica, R-Fla., said he planned to consult with his fellow committee members about appointing a special counsel to “investigate how we got into this financial mess,” according to Reuters.

The hearings are intended to pinpoint what regulatory changes are needed to prevent another such debacle on Wall Street, according to another Reuters article about testimony before the committee today by Richard Fuld, the chief executive officer of the bankrupt investment bank.

Although Fuld took responsibility for the decisions that led to Lehman Brothers’ downfall, he also reportedly said he would never understand why U.S. regulators bailed out other struggling financial institutions but let his own company go down to defeat.

Lawmakers, including the committee chair, Rep. Henry Waxman, D-Calif., meanwhile, were openly critical both of the $484 million in total compensation that Fuld personally has taken home from Lehman Brothers since 2000, reports ABC News. They also spoke harshly of the lavish bonuses that were being recommended for departing executives even as the company was on the verge of filing for bankruptcy.

“If you haven’t discovered your role, you’re the villain today,” Mica told him.

Additional coverage:

Associated Press: “Battered financial industry faces more oversight”

Bloomberg: “Bailout debate puts new spotlight on big Wall Street paychecks”

Bloomberg: “Fuld Blames Lehman’s Fall on Rumors, `Storm of Fear’ “

Give us feedback, share a story tip or update, or report an error.