Schemin’ Lehman
Lehman’s “white collar crime” in a nutshell, from The Reformed Broker:
Repo 105 was an accounting trick that allowed Lehman to temporarily shift $50 billion in liability off of their balance sheet just in time to show investors a quarterly report demonstrating reduced leverage. Once the quarter was closed, Lehman would then repurchase (repo) that debt back onto its balance sheet. And they did this several times.
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Auditors Ernst & Young, the Lehman Bros Board of Directors and especially the Senior Executives who signed off on this practice have committed a crime. This is securities fraud. Their culpability ranges from negligence to outright thievery. It may be Ivy League caliber securities fraud, but it is fraud nonetheless. And if technology or industrial executives had engaged in this exact same behavior, they’d be in court defending themselves right now.
Link from Finance Trends on Twitter.
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“AIG has extended an offer letter to Patton Boggs senior counsel Thomas Russo for the position of general counsel. Russo, who was general counsel at Lehman Brothers during its 2008 bankruptcy, is expected to accept pending talks between AIG and the Treasury Department’s pay czar, Kenneth Feinberg.
AIG is looking for a new GC after Anastasia Kelly left the firm over pay cuts imposed by Feinberg. AIG is currently holding $180 billion in government investments.”
http://www.law.com/jsp/article.jsp?id=1202441906064&hbxlogin=1
http://www.lawcrossing.com/lcviewblog.php?id=5258
Comment by Henry — 3/16/2010 @ 3:22 pm