Business

Hope in the Fuld

He may be one of the most vilified men coming out of the financial crisis, but ex-Lehman Brothers boss Dick Fuld is feeling vindicated in the wake of last week’s 2,200-page report by a court-appointed bank examiner, sources tell The Post.

Fuld privately believes that the report by examiner Anton Valukas provides proof that he did nothing illegal as he steered Lehman through a financial mess that ultimately led the firm to file the largest bankruptcy in US history, according to sources familiar with the matter.

Among Valukas’ findings is that Lehman used an esoteric accounting practice known as “Repo 105,” which allowed the firm to move toxic mortgage assets off its books in order to make it seem healthier.

But while Valukas in the report said that the Lehman estate has “colorable” claims against Fuld, former CFO Erin Callan, and other members of the financial team for not disclosing its use of the Repo 105 transactions, people in Fuld’s camp think differently.

They say that if after poring over reams of documents and sifting through millions of e-mails, Repo 105 is the strongest example of Lehman’s supposed shenanigans, Fuld & Co. are in good shape.

Indeed, the Repo 105 moves were conducted in the wake of the collapse of Bear Stearns and took place while the Federal Reserve and other Wall Street regulators were inside Lehman monitoring the firm’s activities amid worry of another Wall Street meltdown.

Fuld’s sense of vindication comes as word has it that Lehman’s directors and officers may have burned through most of their tens of millions of dollars in insurance coverage that has helped top executives pay legal fees in the 18 months since Lehman fell.

Sources familiar with the situation tell The Post that Lehman’s executive team has hit the limit of its coverage from its primary D&O insurer, Marsh & McLennan, and is coming close to exhausting the funds of its excess carrier, XL Capital. Without that insurance, top execs would have to dip into their own pockets to pay for legal bills associated with the Lehman collapse.

Meanwhile, Joseph Gregory, Lehman’s former No. 2, has hired a headhunter to find a new Wall Street gig, sources tell The Post.

mark.decambre@nypost.com