Investments into Lehman Brothers Financial Instruments Gain New Life as Court Uncovers Stunning New Evidence
Lehman Brothers filed for bankruptcy protection in 2008. Now, a report by a court-appointed examiner provides 2,200 pages of details on the investment firms demise, as well as more leads into further inquiries that may need to be made. (The US Justice Department assigns examiners to bankruptcy cases to probe allegations of misconduct and wrongdoing. The examiners are there to help determine whether creditors can recover more funds and if additional regulatory action needs to occur.)
For example, examiner Anton R. Valukas appears to have found evidence of “actionable balance sheet manipulation, including use of Repo 105, an aggressive accounting practice that allowed Lehman to conceal the full extent of its financial problems. While no US law firm would sign off on this practice, Linklaters, a British law firm, did.
According to Valukas, as long as the repos took place in London through the bank’s European arm and the firm did what was necessary to make the transactions look as if they were sales, then regulatory disapproval was unlikely. Also, even after a whistleblower warned that accounting improprieties were occurring at at Lehman, Valukas says that Ernst & Young continued to certify Lehman’s financial statements.
If you invested in Lehman Brothers stocks, hedge funds, notes, or other Lehman financial products that were sold by other firms, please contact our stockbroker fraud law firm immediately. Shepherd Smith Edwards and Kantas, LLP is committed to helping investment fraud victims throughout the US recoup their financial losses. Already, a number of top Lehman officials have been named defendants in securities fraud lawsuits over their alleged misconduct.
Related Web Resources:
Findings on Lehman Take Even Experts by Surprise, NY Times, March 10, 2010
Read the Examiner Report (PDF)
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