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With last night's announcement from the FBI that they would start investigating allegations that fraud played a role in the downfall of AIG, FNM, FRE, and LEH, many current and former executives of those firms are probably feeling a little nervous this morning.  After all, even if nothing illegal was done, the public is looking for a scapegoat, and nothing helps us forget our problems more than a good old fashioned 'perp walk'.  As is usually the case with perp walks, the higher up you can go, the more effective it is.  The Feds would like nothing more right now than to nail one of these former or current CEOs for some sort of misdeed.  Therefore, these CEO's should expect that regardless of whether or not they deserve it, they are likely to be targeted, and they should be prepared to defend themselves.

One executive who will have no problem defending himself is Lehman Brothers (OTC:LEHMQ) CEO Dick Fuld.  Even though Lehman stock is essentially worthless, according to data from Bloomberg, over the last six years Fuld sold over $500 mln in stock, which should give him more than ample resources for any lawyer fees that come up.  His latest sales came following Lehman's bankruptcy filing last week.  And even though Lehman's stock was trading for pennies, the Lehman CEO netted almost $700K by selling over 3 million shares.  Over the same six-year period, there was not one occurrence where the CEO bought stock in his company at its current market price at the time.  Last Summer, while other former CEOs were criticized for playing bridge or golf, Mr. Fuld sold over $60 million worth of stock.  Who said capitalism wasn't a sport?

click to enlarge

Lehman_fuld_sales_2

Source: Lehman CEO Stock Sales