firm. She lost popularity when she was suspected of being the source of a June
2008 leak to the Wall Street Journal about Lehman’s quest to find a capital
infusion. Amid the static from the leak, Callan offered to resign as a token symbol
to the markets and left the firm. She was replaced by Ian Lowitt.
• Ian T. Lowitt. (Chief Financial Officer) joined Lehman in 1994 from McKinsey &
Company and became the co-chief administrative officer, where he was
responsible for the global oversight of several corporate units, including, finance,
productivity and process improvement, risk management, and technology. Bart
McDade promoted him to CFO after McDade was appointed president in 2008.
• Madelyn Antoncic (Former Chief Risk Officer) joined Lehman Brothers in 1999
from Barclays Capital, where she was head of Market Risk Management and
treasurer for the Americas. She had previously worked at Goldman Sachs and the
NYFED. In 2002 she became chief risk officer responsible for firm-wide market,
credit, and operational risk and helped build Lehman’s risk-management
infrastructure into a world-class operation. In 2007 she was named Bank Risk
Manager of the Year by Risk Magazine. Beginning in 2006, as Lehman loosened its
risk limits in support of a new growth strategy, Antoncic resisted, and in
September 2007, she took on the new role of global head of financial market policy
relations, being replaced as CRO by Christopher O’Meara.
• Christopher M. O'Meara (Chief Risk Officer) joined Lehman in 1994 and held
various positions in the Finance Division until he was promoted to financial
controller in 2001. A year later, he became the firm’s global controller. In
December 2004, he was promoted to chief financial officer of the firm and served
in that position until September 2007, when he was replaced by Erin Callan as
CFO. He in turn, replaced Madelyn Antoncic as chief risk officer.
• Matthew Lee (SVP, Finance) was a 14-year veteran of Lehman, responsible for
balancing the company’s global balance sheet for public reporting. He became
concerned about a number of alleged accounting irregularities, and in May 2008,
sent a letter to Lehman’s senior management alerting them to these, including
concern over Lehman’s use of Repo 105 transactions. The next month his
employment was terminated.
The bankruptcy examiner analyzed the fiduciary duties that Lehman’s management owed to
the firm and their actions and found that colorable claims did not exist with respect to its
handling of the level of risk that Lehman had assumed and its liquidity issues. (Examiner’s
Report, Vol. 1, 52). The examiner did, however, find that colorable claims existed against
Lehman officers Dick Fuld, Christopher O’Meara, Erin Callan, and Ian Lowitt for decisions
regarding the use of Repo 105 and for filing misleading financial statements that did not
disclose such usage (Ibid., Vol. 3, 990-1027).
Lehman’s Board of Directors
When Thomas Cruikshank, one of Lehman’s former board members and chairman of its audit
committee at the time of its demise, testified before the U.S. House of Representatives
Financial Services Committee, he described a competent and involved body of advisors:
“Board meetings were an active and dynamic affair. Board members probed management,
asked numerous questions and demanded and received detailed, cogent answers”
(Cruikshank, 3). However, many questions have been raised regarding the role that the
Lehman board of directors played in the firm’s demise. How active and engaged were the
directors? Was the board composed of the right people, given Lehman’s growth and its
expansion into more sophisticated and complex businesses and products? Most directors did