Lehman risk head speaks out

DAVID DeMuro, the head of compliance at Lehman Brothers during the US investment bank&rsquo;s spectacular collapse last year, has admitted nobody at the firm heeded warning signs it was taking on unsustainable risks.<br /><br />Speaking out for the first time since the bank failed, sending devastating ripple effects through the global economy, he said he should have spoken out more about concerns.<br /><br />Describing the environment before the collapse he said: &ldquo;When there&rsquo;s still money to be made, it&rsquo;s very difficult to walk away. The last few days at Lehman Brothers were a very surreal experience &ndash; there was disbelief &ndash; nobody anticipated the firm would collapse.<br /><br />&ldquo;There was a general understanding of the risk but there was also an almost religious belief in the veracity of the business model,&rdquo; he said in an interview with Complinet.<br /><br />Chris Pilling, chief executive of Complinet, which advises 80 per cent of the FTSE 500 on risk, said DeMuro&rsquo;s remarks come at the dawn of a new age of the compliance officer. He said new regulations to come will tie staff bonuses to treatment of risk, and chief compliance officers will work at a board-room level for the first time.