Lehman Brothers accounting tricks possibly illegal
source: http://news.yahoo.com/s/ap/20100319/ap_on_bi_ge/us_lehman_brothers_whistleblower
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- torres_tn
- added this
Matthew Lee, a former Lehman senior vice president, was fired days after questioning the accounting tricks in a letter to his superiors, attorney Erwin Shustak said. Shustak gave a copy of the letter to The Associated Press.
Lehman Brothers Holdings Inc. imploded in September 2008, becoming the biggest corporate bankruptcy in U.S. history. The collapse sent financial markets across the globe into a free-fall and prompted a massive bailout of the U.S. banking system.
In a letter dated May 18, 2008, Lee wrote that he discovered that the bank had been underreporting its debt by about $5 billion at the end of each month. Lee, a 14-year Lehman veteran, wrote that he felt compelled to report the "discrepancies" under the firm's code of ethics, saying he believed they "possibly constitute unethical or unlawful conduct."
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The examiner, Anton Valukas, discovered that Lehman put together complex transactions that allowed the firm to sell "toxic," mostly mortgage-backed, securities at the end of a quarter — wiping them off its balance sheet when regulators and shareholders were examining it — and then quickly buy them back.
His report doesn't conclude whether executives violated securities laws. It does say that the executives' decision not to disclose the effects of its business judgments appears to be sufficient evidence to support the awarding of civil damages in a trial.
http://news.yahoo.com/s/ap/20100319/ap_on_bi_ge/us_lehman_brothers_whistleblower
Lehman Brothers Holdings Inc. imploded in September 2008, becoming the biggest corporate bankruptcy in U.S. history. The collapse sent financial markets across the globe into a free-fall and prompted a massive bailout of the U.S. banking system.
In a letter dated May 18, 2008, Lee wrote that he discovered that the bank had been underreporting its debt by about $5 billion at the end of each month. Lee, a 14-year Lehman veteran, wrote that he felt compelled to report the "discrepancies" under the firm's code of ethics, saying he believed they "possibly constitute unethical or unlawful conduct."
[...]
The examiner, Anton Valukas, discovered that Lehman put together complex transactions that allowed the firm to sell "toxic," mostly mortgage-backed, securities at the end of a quarter — wiping them off its balance sheet when regulators and shareholders were examining it — and then quickly buy them back.
His report doesn't conclude whether executives violated securities laws. It does say that the executives' decision not to disclose the effects of its business judgments appears to be sufficient evidence to support the awarding of civil damages in a trial.
http://news.yahoo.com/s/ap/20100319/ap_on_bi_ge/us_lehman_brothers_whistleblower
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- groups:
- Community
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- tags:
- Banks, Financial Crisis, Illegal, whistleblower, 1 more
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CaptB
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I feel another company that used Enron accounting practices.
Hmmm, less government intervention equates to corporations committing crimes. I wonder if we had no government intervention? We could possibly have a meltdown of the financial mark...wait, we already had that.
- 1 year ago
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CaptB
