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A Lehman Case Emerges More Than 2 Years After Collapse

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http://dealbook.nytimes.com/2010/12/20/after-ernst-young-who-may-be-next/?ref=business

More than two years after Lehman Brothers imploded, nearly bringing the global economy to its knees, regulators are preparing to file the first major legal action stemming from the collapse of the investment bank.

The charges, however, are not expected to be leveled against senior executives at Lehman, but rather against the accounting firm that audited the firm’s financial statements.

A civil fraud lawsuit could be brought by the New York attorney general against Ernst & Young by Tuesday, accusing the accounting firm of helping Lehman mislead investors, according to a person briefed on the matter. Ernst & Young certified the financial statements of Lehman from 2001 until the firm’s bankruptcy filing in September 2008.

The two sides have had discussions on a settlement, this person said. The possibility of a lawsuit was earlier reported by The Wall Street Journal.

Nice to see that no senior banking executive is to blame, it's all the fault of the auditors. I'm not saying the auditors are blameless but if they have been given cooked books to start with it's a little hard for them to find they aren't up to scratch if all the columns add up, plus they are paid to sign the books off. A slight conflict of interest their I think.

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http://dealbook.nyti...t/?ref=business

Nice to see that no senior banking executive is to blame, it's all the fault of the auditors. I'm not saying the auditors are blameless but if they have been given cooked books to start with it's a little hard for them to find they aren't up to scratch if all the columns add up, plus they are paid to sign the books off. A slight conflict of interest their I think.

I reckon they will add the banksters to another suit mind you. But right now EY have deeper pockets.

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I'm not saying the auditors are blameless but if they have been given cooked books to start with it's a little hard for them to find they aren't up to scratch if all the columns add up, plus they are paid to sign the books off. A slight conflict of interest their I think.

...yes ...but they can be sued by shareholders if proved negligent.... :rolleyes:

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http://dealbook.nytimes.com/2010/12/21/cuomo-sues-ernst-young-over-lehman/?ref=business

The New York attorney general on Tuesday sued Ernst & Young, accusing the accounting firm of helping Lehman Brothers, its client, “engage in a massive accounting fraud” by misleading investors about the investment bank’s financial health.

The lawsuit, filed more than two years after Lehman collapsed and the global economy buckled, is the first major legal action stemming from Lehman’s demise.

Ernst & Young, Lehman’s longtime outside auditor, certified the bank’s financial statements from 2001 until it filed for bankruptcy in September 2008. The suit focuses on Ernst & Young’s approval of a much-criticized accounting maneuver that shifted debt off the books before the close of financial quarters.

The transactions involved “the surreptitious removal of tens of billions of dollars of securities from Lehman’s balance sheet to create a false impression of Lehman’s liquidity, thereby defrauding the investing public,” the complaint said.

The lawsuit seeks the return of more than $150 million in fees that Ernst & Young collected for work performed for Lehman from 2001 to 2008, plus investor damages.

All that matters is that no one goes to jail.

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the report says the firm AIDED and HELPED the firm give a false impression.

I should imagine more charges will follow.

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Can I just add that I believe all these Repo 105 transactions took place in London as the legal definition of what constituted a real 'trade' was looser and they could get London legal firms to sign off on it.

I'm embarrassed at how much of the whole disaster centred on London - from Madoff to AIG to Repo 105's, to the entire industry of trading structured credit - you couldn't make it up.

No need to make it up HAM, it would appear London did it all for real.

Light touch regulation doesn't encourage fraud just enterprise.

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  • 309 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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