A report into the collapse of Lehman Brothers criticises senior executives and auditor Ernst & Young for serious lapses that led to the firm’s collapse.
The report says Lehman was insolvent for weeks before it went bankrupt, sparking a global financial meltdown.
It accuses management of “actionable balance sheet manipulation” and using accounting tricks to hide debts.
Ernst & Young said that its last audit of Lehman was “fairly presented” according to accounting rules.
The collapse of the 158-year-old investment bank in September 2008 was the world’s largest bankruptcy.
Wall Street, the City of London, and the US and UK governments tried to organise a rescue, fearing – rightly – that Lehman’s failure would set off a chain reaction around the globe.
Possible claims
Friday’s 2,200-page forensic analysis into what went wrong says there could be grounds for legal action against former executives.
Lawyer Anton Valukas, who led the inquiry, stops short of saying that there was systematic wrong-doing at the firm.
Read more here: http://news.bbc.co.uk/2/hi/business/8563604.stm
