- Damning Lehman Report Released
The N.Y. Times today details the 2,200-page report by Lehman Bros. examiner Anton Valukas, who found that the bank engaged in “materially misleading” accounting tactics to hide its debts. Valukas, the chairman of Jenner & Block and an experienced litigator, was appointed examiner by the U.S. Trustee to identify the causes of the bankruptcy, the largest in history. According to Valukas’ report, Lehman moved $50 billion in bad assets off its books in its final months, and Lehman executives and the bank’s accountants at Ernst & Young knew about it. The reports says that former Lehman leader Richard Fuld is “at least grossly negligent.”
Much of the document is devoted to Lehman’s accounting schemes known as “Repo 105,” which were first used in 2001 to shuffle massive amounts off the books to reduce debt levels. Ernst & Young issued a statement insisting that Lehman’s statements “were in accordance Generally Accepted Accounting Principles (GAAP).” Fuld lawyer Patricia Hynes said in a statement that her client didn’t know what the accounting tactics were. There have been no criminal charges yet in the Lehman matter. The report should provide assistance to civil claimants, as Valukas describes the asset manipulations as "actionable."
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| 07:06 AM Mar 12, 2010 | Email the Daily Dragon | Email this Article | Post Comments |
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