Posted on 03/13/2010 7:00:53 AM PST by americanophile
For the year that it took the court-appointed examiner to complete his report on the demise of Lehman Brothers, officials from Wall Street to Washington were anticipating it as the definitive account of the largest bankruptcy in American history.
And the report did just that when it was unveiled on Thursday, riveting readers with the exhaustive detail contained in its nine volumes and 2,200 pages. Yet almost immediately, it raised a host of new questions.
Now government regulators have what some lawyers call a road map for further inquiry into former Lehman executives like Richard S. Fuld Jr. and the auditing firm Ernst & Young.
Whether the Justice Department and the Securities and Exchange Commission will actually pursue their own legal actions is unclear. But legal experts said on Friday that the examiner, Anton R. Valukas, had provided plenty of material for civil regulatory action at the least with his findings of “materially misleading” accounting and “actionable balance sheet manipulation.”
(Excerpt) Read more at nytimes.com ...
"the new discoveries by Mr. Valukas have taken even veteran observers by surprise. Chief among these was the revelation of a particularly aggressive accounting practice, known internally as Repo 105, that Mr. Valukas said helped the investment bank mask the true depths of its financial woes -snip- Over hundreds of pages, Mr. Valukas details the genesis of and the process behind Repo 105. Based on standard repurchase agreements — short-term loans commonly used by many firms for daily financing needs, in which borrowers temporarily exchange assets in return for cash up front — Lehman took a particularly aggressive accounting approach to these transactions.
Here, the investment bank used repos to temporarily park assets off its books to make its end-of-quarter debt levels look better than they did — while calling them sales instead of loans.
The accounting tactic, first used by Lehman in 2001, had one catch, according to Mr. Valukas: no American law firm would sign off on its use.
Enter Linklaters, a highly respected British law firm that gave Lehman the answer it wanted. So long as the repos were conducted in London through the bank’s European arm, and so long as the company took other cosmetic steps to make these transactions appear to be sales instead of financings, Linklaters determined that they would pass regulatory muster."
look
We shall se, shan't we?
I won't hold my breath.
Geithner was ‘uniquely’ qualified....
The accounting tactic, first used by Lehman in 2001, had one catch, according to Mr. Valukas: no American law firm would sign off on its use.
I believe a court-appointed examiner is really just an attorney seeking cause to file suit. Not defending Lehman -just saying this may not be the most impartial of reports. It sounds like it’s an official government finding, but it’s not.
Shocked. I am shocked.
Members of the 110th Congress who have received campaign contributions from Lehman Brothers, 1989-2008
Name Office State Party Grand Total Total from
PACs Total from
Individuals
Clinton, Hillary S NY D $409,980 $3,000 $406,980
Obama, Barack S IL D $395,574 $0 $395,574
Schumer, Charles E S NY D $181,450 $25,500 $155,950
Dodd, Christopher J S CT D $165,800 $25,400 $140,400
This is being released to support more federal regulation of the banking industry and Wall Street.
Naturall. We must kill the Golden Goose for justice’s sake.
>This is being released to support more federal regulation of the banking industry and Wall Street.
Except that “no American law firm” would sign off on it indicates that those regulations are unneeded.
That won’t deter Dodd and company from ramming through the current bill to regulate further the financial industry. They will cite this report. You can’t rely on American law firms to achieve the Dems socialist agenda.
The Lehman “golden goose” was killed by corruption ,, packaging and selling securities that were designed from inception to fail spectacularly ,, collecting commissions on the sales while they bet huge amounts on the securities failing. They would have made a mint if they had the Geitner connection to force payment on their insurance/cds’s like GS did with the American taxpayers via AIG.
and who got 90% of Lehman’s political contributions?
I’ll believe Congress is sincere in wanting financial reform when they launch an investigation of Goldman Sachs. Oh, that’s right...GS is “too big to investigate” because so many government officials have come from that mother ship.
...and the Wall Street golden goose will be killed by regulation - regulation that will increasingly eliminate risk-taking and therefore profitability, and drive capital overseas.
A PC word for "cooking the books".
Yet the biggest and most corrupt group, government (politicians) as is normal, escapes again. They (the greedy politicians) have created such a huge national debt our nation is on the road to bankruptcy and in more ways than just financial.
and who got 90% of Lehman’s political contributions?
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Like all the NYC libs the rats got the cash... paying for a LACK of REGULATION to allow the corruption to continue ... Clear rules enforced fairly do not stop risktaking and profitability,, they allow more players to compete ,, not just GS , MS and Lehman.
The risk isn’t ‘clear rules’ it’s a congressional ‘fix’, sure to come, with unintended consequences that’s worse than the problem.
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