March 12, 2010

The Vindication Of David Einhorn

John Carney, Clusterstock

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The bankruptcy examiners's report on Lehman Brothers should finally put to an end the long-running debate about the role of short-sellers in the collapse of the firm.As the headline in the Wall Street Journal put it "Lehman Torpedoed Lehman."In other words don't blame the shorts.Former chief executive Dick Fuld blamed the shorts for "rumor monger" and market manipulation both before Lehman went bankrupt and afterward."The naked shorts and rumor mongers succeeded in bringing down Bear Stearns. And I believe that unsubstantiated rumors in the marketplace caused significant harm to Lehman Brothers,” Fuld told a Congressional panel investigating the financial crisis.Fuld reportedly believed that a cable of hedge fund short sellers led by Goldman Sachs were conspiring to bring down...

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TAGGED: Lehman Brothers, David Einhorn

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