Raw Story:
A court-appointed expert has blamed the collapse of investment bank Lehman Brothers on its top management as well as audit firm Ernst & Young and banks Citigroup and JPMorgan Chase.
The 158-year-old bank filed for protection in September 2008 in the largest US bankruptcy filing in history, leaving the future of 25,000 staff in jeopardy and sending a financial tsunami across the globe.
In a scathing 2,200-page report, Anton Valukas on Thursday accused the senior management of "actionable balance sheet manipulation" and said they oversaw and certified decisions that exacerbated Lehman's woes...
And from the Financial Times:
Anton Valukas, the court-appointed examiner, concluded that there was sufficient evidence to support a claim that Mr Fuld and other executives breached their fiduciary duties by “allowing and certifying the filing of financial statements that omitted or misrepresented material information”.
He also said there was “credible evidence” to support a claim that Mr Fuld’s failure to decide to disclose the transactions was “grossly negligent or demonstrated a conscious disregard of his duties”...
>>>This is from Daily Finance:
The comprehensive report of Lehman Brothers Holdings' path to bankruptcy that bankruptcy examiner Anton Valukas released yesterday is stunning in its depth and breadth. It details so many repeated, deliberate material misstatements the firm made in securities filings and public statements about its financial condition that former Chief Executive Officer Richard Fuld and former Chief Financial Officer Erin Callan and will almost certainly face criminal charges, and former CFOs Chris O'Meara and Ian Lowett quite possible could as well. Indeed, if the information in the report is true -- and Valukas reviewed millions of documents, conducted over 100 interviews and thoroughly footnotes his report -- it's hard to see how they can escape conviction.
In an interview with Bloomberg TV, former Lehman CFO Brad Hintz said all brokerage firms would bring down their balance sheets at quarter's end by selling securities, but that doesn't address the issue here. The Valukas report says Lehman under Fuld was essentially faking sales, so that the resulting balance sheet was false -- not just temporarily, but genuinely, brought down. Morevover, Hintz confirms that no other firms were using the so-called Repo 105 transactions that constituted Lehman's purported asset sales....
Ohioans want to know exactly what Kasich did at Lehman Brothers? Did he participate in any of this?
*** In the New York Observer (September 16, 2001), we find this:
"Never in my life did I think that I'd be spending time on
zero-convert coupon bonds," he says with a smile. Zero-convert what? "It's
where you don't want to pay anybody anything, and you get to a certain strike
price and they can convert and buy stock."
....So when Mr. Fuld made him an offer to come to Lehman
Brothers, he jumped. "Fuld is an awesome guy," Mr. Kasich enthuses. "He is the
kind of guy you want to go into battle with. He is a great leader. I like
people who are really smart and who are great leaders."
...Already, he says, his friendship with venture-capital bigwig
Mark Kvamme at Sequoia Capital has helped Lehman Brothers' private-equity team
get into a few early-stage portfolio investments. But more than anything, Mr.
Kasich just wants to be one of the guys. "When I walk into a room and the
bankers start talking about financing, I want to be part of that discussion,"
he says earnestly. "The other day I was with a health-care banker, talking
about one of our big targets. He was saying the key is financing. I said,
'True, but we should really think about doing some M&A for them, too.'"
Frank Quattrone he may not be, but this is just the
beginning, and Mr. Kasich seems to be enjoying the learning. And his peers at
Lehman are duly impressed. "I'm finally calling him a banker now," chuckles Mr.
Kasich's boss, managing director Gary Weinstein.....Should we trust Kasich?