The National Law Journal named him one of the 100 most influential lawyers in America.
His legal career spans 45 years, and includes—among other things—a stint as regulator at the Securities and Exchange Commission, partner at a Wall Street law firm, and adjunct professor at an Ivy League business school.
But Thomas A. Russo, who holds both a J.D. and an M.B.A. from Cornell, is perhaps best known for the time he spent, in his words “strapped into one of the lead cars during the great economic roller coaster ride of 2008–2015.”
He was chief financial officer and general counsel at Lehman Brothers from 1993 until the end of 2008, when the global financial crisis hit and the venerable 158-year-old bank—then the fourth largest in the country—was forced to declare bankruptcy after the Federal Reserve declined to rescue it.
Then, in 2010 Russo was named executive vice president and general counsel at AIG, a company that the government did bail out, and he helped lead the successful effort to restore it to financial health, while repaying the government’s $182 billion loan as well as a profit of $22 billion.
“I was the only person in both [situations],” he notes.
About a year before Lehman’s bankruptcy, Russo warned the Group of 30 about a possible credit crunch that might cause a financial crisis, but his concerns weren’t heeded.
In fall 2008, he warned the Fed that if Lehman was forced to go under the impact would cascade through the financial markets, affecting all investors, and the global economy would deteriorate at unprecedented levels.
That is pretty much what happened,as we all now know.
“[Through] my experiences at Lehman and AIG, I have seen the worst and best of government,” he now comments.“The Fed was the only one that could take and hold those assets long enough to recognize the value. It’s what it was created to do.” By not doing it for Lehman, it worsened the crisis, he believes.
“Tom’s resilience and ingenuity in being able to advise Lehman through the financial crisis and then to guide AIG through its post-crisis resurrection is nothing short of remarkable,” says Andrew Levander, who represented Lehman Brothers in post-bankruptcy litigations and is now a partner in securities litigation at Dechert.
Russo grew up on Staten Island, where he ran track in high school, had a ham radio and liked computer programming. He attended Fordham College, where a professor introduced him to the analytical aspects of economics, which he liked and was good at, prompting him to enroll in Cornell’s joint graduate degree program in law and business.
While at Cornell Law School he impressed Professor Harry Henn, who taught corporate law and later invited him back as a guest speaker. Professor Rudy Schlesinger, who taught international law, also made a lasting impression. “He was brilliant and gave life to any subject,” says Russo.After graduation he became an attorney in the Security and Exchange Commission’s division of market regulation. “I had the great opportunity of learning about securities law from the inside out as well as how a government agency works,” comments Russo.
He joined the law firm of Cadwalader, Wickersham & Taft as an associate in 1971, where he became interested in how to regulate subsidiary markets. He left in 1975 to become deputy general counsel of the Commodities Futures Trading Commission, where he served as the first director of the CFTC’s Division of Trading and Markets.
In 1978 he returned to Cadwalader, where he made partner and became a member of the management committee but decided to leave again in January 1993 to join Lehman.
“As partner I found I was working seven days a week around the clock,” comments Russo. “I learned that to be successful in anything, you must figure out the allocation of time that brings you the greatest happiness.” Making more time for family and volunteering became essential to him. Today he readily shares his strategy, which he calls “Ingredients for a Successful Life,” and which also offers guidelines for valuing colleagues at all levels.
“Tom has enormous empathy and treats others with dignity and respect,” says Peter Hancock, CEO of AIG. “He is a shining example that doing so is not only a recipe for getting business done, but also for contentment in life. To paraphrase his favorite poem, Rudyard Kipling’s ‘If,’ he is able to walk with kings yet not lose the common touch.”
At a retirement dinner, Russo was given a laminated copy of that poem with tributes from Lehman co-workers telling him how he had influenced their lives for the better. It was very moving, Russo says. “Ultimately success is being respected as a person, not for the position you hold.”
An ardent volunteer, Russo chairs the executive committee of the Institute of International Education, which administers the Fulbright Scholarship Program, and helped found its Scholar Rescue Fund. An adjunct faculty member at Columbia School of Business, he has written or co-written such books as The 2008 Financial Crisis and It’s Aftermath: Addressing the Next Debt Challenge and more than 70 articles on legal issues related to financial market regulation.
“My concern is debt is growing, growth has been slow and the tools we had [for averting a future monetary crisis] are diminished — and there’s always a crisis,” warns Russo.
He and his wife have twin daughters, now grown, and a son who is a junior at Cornell.