Lehman debacle: one of greatest crimes ever?
After 15 months and 2,200 pages of writing, the Lehman Brothers report has been released. As expected, the details are pretty gruesome. It explains how Repo 105 transactions allowed Lehman to exchange illiquid assets for short-term cash loans in order to disguise the crumbling financial state of the firm in its last days. How bad were the lies?Skip to next paragraph
The Daily Reckoning
Addison is editorial director of The Daily Reckoning and executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He’s a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post, as well as major network news programs.
Subscribe Today to the Monitor
Well, the report shows the transactions were not shown as loans. Instead, they were listed as sales… making Lehman’s accounting essentially fraudulent. According to emails described in the report, CEO Richard Fuld and about three different CFOs were all likely aware of the cover-up. Yet they still approved and signed off on the quarterly and annual reports.
Further, it appears that even Lehman’s auditor Ernst & Young… in the not-so-fine tradition of Arthur Andersen — that was brought down in the Enron scandal – knew about the Repo transactions and did nothing to sound an alarm. So much deception… and so many accomplices…
Here are two choice quotes from the segment:
“Now keep in mind, when I talk about taking money, I really mean taking money. Lehman Brothers CEO Richard Fuld, for instance, paid himself, with schemes likes this, one half of a billion dollars in personal compensation during his tenure at the firm according to the FT.”
“The bottom line: While many Americans and many in our government would love for you to believe that the financial crisis and the transfer of wealth in this country was an accident, this report comes just short of suggesting this is by no means an accident, but instead one of the greatest crimes ever perpetrated against a group of people, this crime, an accounting fraud, perpetrated by bank CEOs against the American taxpayer and enabled by the US government…”
The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.