Today’s Headlines About the Arrest of Lehman’s Former Chief Operating Officer’s for Prescription Forging Have a Crucial Message for all Wall Street Firms

So today my phone has rung off the hook.


The New York Times Dealbook broke the news that Lehman Brothers former COO Bradley (Brad) Jack, who owns the most expensive home in Fairfield, CT, worth $34.6 million was “charged with second-degree forgery and forgery of a prescription drug.”

If he is convicted, he faces jail time, which would make him the first Lehman senior executive to don a jump suit.

On one level this is a huge irony, since as I wrote in my 2010 book, The Devil’s Casino: Friendship, Betrayal and the High Stakes Inside Lehman Brothers (John F. Wiley & Sons) — despite massive unethical and irresponsible business practices, appalling management and board oversight, as well as highly questionable earnings results in 2008 — no one from the erstwhile Lehman Brothers is yet anywhere close to being headed to the Big House.

Bradley Jack could not be held responsible for any of the above since, as I wrote in my book, he was forced out of the firm in 2004 by the Machiavellian man wanting to become the firm’s president (number two): Joe Gregory.

And if anyone wants to blame a single person for Lehman’s demise — well, in my view, after Fuld, it is Joe Gregory who promoted all the wrong people (loyalists to him, rather than competent financiers), punished dissent with backstabbing and was more interested in telling everyone about his lavish lifestyle than managing the firm.

In 2004 Gregory got rid of Jack who was his competitor for the job of President — unfilled since 1997. How did Gregory do this? He told Dick Fuld, the CEO that Jack was allegedly abusing prescription drugs. (Jack had suffered cancer and had a scar right across his torso). I asked Jack about the allegations at the time I was reporting the book and he denied them. But he did talk to me about Gregory’s very “unsympathetic” attitude towards his recuperation, which only made it harder for him to get better. He felt he had to watch his back every second. He knew Gregory was out to “get” him — as did his then-wife Karin, who complained bitterly of the conniving of Gregory’s wife, Nikki. Nikki, she claimed deliberately left her out of an antiquing trip with Kathy Fuld at the Fuld’s home in Sun Valley (Nikki Gregory never commented on this but both Jacks corroborated the story — as did others).

So today’s news that Jack allegedly handed in a fake prescription for 12 Oxycontin pill and nine Ritalin pills at a CVS in Fairfield has not shocked me or the ex-Lehmanites.

But personally I feel sorry for Jack. I left him a sympathetic message along with his ex-wife Karin who provided some of the more blood-curdling material in my book about the tough Orwellian Lehman culture. It was Karin Jack who explained that Lehman wives were expected to give birth on their own, move house on their own — and in one especially grim scenario leave a very sick child’s bedside in order to get on a helicopter to visit a new mcMansion purchased by….Joe Gregory. The senior executives’ lives were subordinated — not for the business — but to pay lip-service to a vain greedy man.

So there are two lessons here.

Had Brad Jack worked for a culture that supported rather than culled illness, maybe we would not be reading today’s headlines. They are a brutal reminder of what a truly horrible place Lehman became, ruining the reputation of what had once been a place of dreams.

But more importantly they illustrate the importance of a firm’s culture. If Lehman’s culture had cultivated dissenting opinions, been more tolerant of illness in capable people, and less about men terrified of losing their corner suites — then they would not have fallen — and more broadly, of course, they would not have caused a worldwide catastrophe which doesn’t seem to be getting much better three years on. All Wall Street firms would be wise to think about this.


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