Lehman Fraud Confirmed

by: Hopeful

Thu Mar 11, 2010 at 11:18:58 PM EST

When you take that kind of gamble and lose, it's really no one else's fault, unless the leaders at Lehman who convinced the pension fund were somehow committing fraud. The New York Times reports that a new report says it was fraud and there is evidence to support a lawsuit:

But the examiner, Anton R. Valukas, also for the first time laid out what the report characterized as "materially misleading" accounting gimmicks that Lehman used to mask the perilous state of its finances...

Mr. Valukas writes in the report that "colorable claims" could be made against some former Lehman executives and Ernst & Young, meaning that enough evidence existed that could lead to the awarding of damages in a trial. He added that Lehman's directors were not aware of the accounting engineering.

By his reckoning, Lehman managed to "shed" about $39 billion from its balance sheet at the end of the fourth quarter of 2007, $49 billion in the first quarter of 2008 and $50 billion in the second quarter. At that time, Lehman sought to reassure the public that its finances were fine - despite pressure from short-sellers.

There's a lot more in the article. Obviously the money is not going to be recovered, but both for the sake of justice and to discourage future Wall Street trickery I hope New Jersey vigorously sues everyone who knew.