Dogs have small teeth, little stomach. Throw Lehman off the back of the wagon and get clean away from the posse!
They all have the same accounting methods. No collateral required for Morgan or Goldman Sacks to write derivatives naked against the middle as required. Print money for loans based on nothing, then sell the mortgage security to the hidden Enron partners and dope dealers and insure the mortgage security with AIG, then bail out AIG with taxpayer money. NYC bank 10,000 stalking horses loan jumbo 125% equity, and no-down 100% of equity, and balloon no-interest for a while, and then we got to play--no income checks meant we could use jumbos and no downs to buy a dozen houses and count rent as income(nobody was counting!). Then target banks, Wachovia and Washington Mutual, thought it safe to refinance those. Then, the NYC banks and GS back out and then come back in with bailouts to make the kill, then drain the blood out of target banks to pay the bailout back and avoid the accounting requirement. Accounting? Lehman did it. Only Lehman. Lehman is crazy. Run, Spot, Run. Oswald went thataway. -Bob --- In cia-drugs@yahoogroups.com, Robert Millegan <ramille...@...> wrote: > > > ------ Forwarded Message > > From: "dasg...@..." dasg...@... > > Date: Sat, 13 Mar 2010 02:58:55 EST > > To: Robert Millegan ramille...@... > > Cc: ema...@..., j...@..., jim6...@..., > > christian.r...@... > > Subject: What Do You Call a Wall Street CEO in San Quentin? A Good Start. > > > > > Findings on Lehman > > Take Even Experts by Surprise > > By MICHAEL J. de la MERCED > > <http://topics.nytimes.com/top/reference/timestopics/people/d/michael_j_\ de_la_ > > merced/index.html?inline=nyt-per> > > New York Times: March 12, 2010 > > http://www.nytimes.com/2010/03/13/business/13lehman.html > > > > > > <javascript:pop_me_up2('http://www.nytimes.com/imagepages/2010/03/13/bus\ iness/ > > 13lehman_CA0.html','13lehman_CA0_html','width=570,height=600,scrollbars=\ yes,to > > olbars=no,resizable=yes')> > > Richard Fuld, former chief executive of Lehman, testifying on Capitol Hill in > > October 2008. > > > > <http://www.nytimes.com/adx/bin/adx_click.html?type=goto&opzn&page=www.n\ ytimes > > .com/yr/mo/day/business&pos=Frame4A&sn2=a23bc051/6ffe8c2e&sn1=c488950/af\ 17707f > > &camp=foxsearch2010_emailtools_1225564c_nyt5&ad=OFW_120x60_d_03.12&goto=\ http%3 > > A%2F%2Fwww%2Efoxsearchlight%2Ecom%2Fourfamilywedding> > > For the year that it took the court-appointed examiner to complete his report > > on the demise of Lehman Brothers > > <http://topics.nytimes.com/top/news/business/companies/lehman_brothers_h\ olding > > s_inc/index.html?inline=nyt-org> , officials from Wall Street to Washington > > were anticipating it as the definitive account of the largest bankruptcy in > > American history. > >> > >>> > >>> > >>> > >>> > >>> In Lehman¹s Demise, Some Shades of Enron > >>> <http://dealbook.blogs.nytimes.com/2010/03/12/in-lehmans-demise-some-sha\ des- > >>> of-enron/?ref=business> > >>> > >>> > >>> > >>> > >>> White Collar Watch finds Lehman Brothers¹ accounting gimmicks are eerily > >>> reminiscent of those used by Enron, and it anticipates that the government > >>> will pursue civil charges, at the least, for securities fraud. > > > > And the report did just that when it was unveiled on Thursday, riveting > > readers with the exhaustive detail contained in its nine volumes and 2,200 > > pages. Yet almost immediately, it raised a host of new questions. > > > > Now government regulators have what some lawyers call a road map for further > > inquiry into former Lehman executives like Richard S. Fuld Jr. > > <http://topics.nytimes.com/top/reference/timestopics/people/f/richard_s_\ fuld_j > > r/index.html?inline=nyt-per> and the auditing firm Ernst & Young. > > > > Whether the Justice Department and the Securities and Exchange Commission > > <http://topics.nytimes.com/top/reference/timestopics/organizations/s/sec\ uritie > > s_and_exchange_commission/index.html?inline=nyt-org> will actually pursue > > their own legal actions is unclear. But legal experts said on Friday that the > > examiner, Anton R. Valukas, had provided plenty of material for civil > > regulatory action at the least with his findings of ³materially misleading² > > accounting and ³actionable balance sheet manipulation.² > > > > ³It¹s certainly not helpful to any of them,² Michael J. Missal, a partner at > > the law firm K&L Gates and the examiner in the bankruptcy case of New Century > > Financial, said of some individuals accused of impropriety in the report. ³It > > certainly assists private litigants and probably increases the pressure on the > > government to take some kind of action here.² > > > > Representatives for the S.E.C. and the United States attorneys > > <http://topics.nytimes.com/top/reference/timestopics/subjects/u/united_s\ tates_ > > attorneys/index.html?inline=nyt-classifier> offices in Manhattan and Brooklyn > > declined to comment. > > > > While Mr. Fuld and other former top Lehman officials are already defendants in > > a number of civil lawsuits, the new discoveries by Mr. Valukas have taken even > > veteran observers by surprise. Chief among these was the revelation of a > > particularly aggressive accounting practice, known internally as Repo 105, > > that Mr. Valukas said helped the investment bank mask the true depths of its > > financial woes. > > > > Examiners in bankruptcy cases are appointed by the Justice Department to > > investigate accusations of wrongdoing or misconduct. Their job is to determine > > whether creditors can recover more money in these cases, and their findings > > often serve as guides for more lawsuits and even regulatory action. What > > examiners are not asked to do is play judge and jury. > > > > Though the report contains strong language Mr. Valukas deems Mr. Fuld ³at > > least grossly negligent² in his role overseeing Lehman it stops short of > > accusing anyone of criminal conduct or of violating securities law. > > > > Patricia Hynes, a lawyer for Mr. Fuld, said on Thursday that her client ³did > > not know what those transactions were he didn¹t structure or negotiate them, > > nor was he aware of their accounting treatment.² She did not return an e-mail > > seeking additional comment on Friday. > > > > Mr. Valukas¹s findings have stirred loud discussion among legal and accounting > > experts over the ways Lehman sought to improve its quarterly results months > > before it collapsed. > > > > Over hundreds of pages, Mr. Valukas details the genesis of and the process > > behind Repo 105. Based on standard repurchase agreements short-term loans > > commonly used by many firms for daily financing needs, in which borrowers > > temporarily exchange assets in return for cash up front Lehman took a > > particularly aggressive accounting approach to these transactions. > > > > Here, the investment bank used repos to temporarily park assets off its books > > to make its end-of-quarter debt levels look better than they did while > > calling them sales instead of loans. > > > > The accounting tactic, first used by Lehman in 2001, had one catch, according > > to Mr. Valukas: no American law firm would sign off on its use. > > > > Enter Linklaters, a highly respected British law firm that gave Lehman the > > answer it wanted. So long as the repos were conducted in London through the > > bank¹s European arm, and so long as the company took other cosmetic steps to > > make these transactions appear to be sales instead of financings, Linklaters > > determined that they would pass regulatory muster. > > > > A spokeswoman for Linklaters said on Friday that the firm was not contacted by > > Mr. Valukas and that its legal opinions were not criticized in the examiner¹s > > report as wrong or improper. > > > > Lehman also had the backing of Ernst & Young, which certified the bank¹s > > financial statements despite receiving warnings from a whistle-blower who said > > there were accounting improprieties. An Ernst & Young spokesman said on > > Thursday that the firm stood by its work for 2007, the last year it conducted > > an audit of Lehman¹s financial results. > > > > But Lynn E. Turner, a former chief accountant for the S.E.C., accused Ernst & > > Young of abdicating its responsibility to the audit committee of Lehman¹s > > board by not presenting the concerns. > > > > ³This is pretty aggressive and pretty abusive. I don¹t know how under GAAP > > this follows the rules whatsoever,² he said, referring to Generally Accepted > > Accounting Principles. > > > > ³That reeks of an auditor who, rather than being really truly independent, is > > beholden to management,² he said, adding that the S.E.C. and the Justice > > Department should follow up on Mr. Valukas¹s findings. > > > > Executives at other Wall Street banks professed surprise at Lehman¹s > > accounting maneuvers. Goldman Sachs > > <http://topics.nytimes.com/top/news/business/companies/goldman_sachs_gro\ up_inc > > /index.html?inline=nyt-org> , Barclays > > <http://topics.nytimes.com/top/news/business/companies/barclays_plc/inde\ x.html > > ?inline=nyt-org> Capital, and other banks said on Friday that they did not > > use repos to hide liabilities on their balance sheets. > > > > > > Lehman report may point way for criminal charges > > Dan Margolies > > WASHINGTON > > Fri Mar 12, 2010 6:36pm EST > > http://www.reuters.com/article/idUSTRE62B4M820100312 > > <http://www.reuters.com/article/idUSTRE62B4M820100312> > > WASHINGTON (Reuters) - An explosive report by a court-appointed examiner on > > the collapse of Lehman Brothers may prove to be a roadmap for prosecutors to > > bring criminal cases against the investment bank's former executives, legal > > experts say. > > > > The 2,200-page report could lay the groundwork for felony charges under > > securities fraud laws, the Sarbanes-Oxley Act or New York's Martin Act, which > > is more expansive than federal securities laws, the experts say. > > > > "I think there are definitely criminal liability issues here -- especially for > > at least the handful of executives who sent emails making clear they knew they > > were helping Lehman hide its liabilities," said Elizabeth Nowicki, a former > > lawyer with the Securities and Exchange Commission and now a visiting > > professor at Boston University School of Law. > > > > Even with a roadmap, getting to a place where a criminal case can be brought > > will be difficult. The bar is high, as prosecutors must be able to prove > > intent. And while Lehman may have been at the epicenter of the financial > > quake, it was not the only failure during the financial crisis. > > > > That may explain why, a year and a half after the Lehman bankruptcy, no > > criminal cases have yet been announced. > > > > Still, a dozen former Lehman executives, including former CEO Richard Fuld, > > have been subpoenaed in federal grand jury investigations. Representatives for > > both the U.S. attorney in Manhattan and the U.S. attorney in Brooklyn declined > > to comment on Friday. > > > > The report by the examiner, Anton Valukas, a former prosecutor and chairman of > > the law firm Jenner & Block, points to one direction prosecutors may take -- > > accounting tricks. > > > > The report details how Lehman used an accounting gimmick to move $50 billion > > in assets off its balance sheet, making the now-bankrupt banking firm appear > > financially healthier than it was. > > > > The report said the use of the accounting device was "materially misleading" > > and done for the sole purpose of "balance sheet manipulation." > > > > In finding that there may be "colorable claims" against senior officers who > > oversaw and certified misleading financial statements, the report virtually > > invited prosecutors to bring claims under Sarbanes-Oxley, which imposes > > criminal penalties on CEOs and CFOs who knowingly attest to misleading > > statements. > > > > "What Sarbanes-Oxley tried to do was eliminate the old 'blind, deaf and dumb' > > defense of CEOs," said Terry Connelly, dean of the Edward S. Ageno School of > > Business at Golden Gate University and a former executive at Salomon Brothers. > > > > "The question is whether the treatment of these accounting transactions was > > material and misleading. Did it matter to the market? The answer is, of > > course, yes. The relevant question is whether they were misleading, and the > > facts there, I think, speak for themselves." > > > > In a statement on Thursday evening, a lawyer for Fuld said the former chief > > executive "did not know what those transactions were -- he didn't structure or > > negotiate them, nor was he aware of their accounting treatment." > > > > Connelly called that response "very much like the old deaf, dumb and blind > > defense." > > > > "You could get away with that before Sarbanes-Oxley. I'm not sure you can get > > away with that now," he said. > > > > To make it appear that it was reducing its debt levels in 2008, Lehman > > employed an accounting device called "Repo 105," a kind of repurchase > > agreement. > > > > Lehman did not disclose the Repo 105 transactions to the investing public and > > a top Lehman executive, global financial controller Martin Kelly, believed > > "there was no substance to the transactions," according to the examiner's > > report. > > > > "These transactions were undertaken for no legitimate economic purpose," said > > Bill Black, a criminologist at the University of Missouri-Kansas City and a > > former savings and loan regulator. "They were done to game the numbers." > > > > To the extent investors were kept in the dark, "you have all the elements here > > of felony securities fraud," he added. > > > > Black said criminal culpability could reach Fuld if prosecutors proceed up the > > chain, first targeting those responsible for the accounting chicanery and > > "flipping" them to obtain their testimony against higher-ups. > > > > "It's pretty hard to conceive that prosecutors would not go after them. And > > those guys are going to point the finger at the chief financial officers, who > > will point the finger at the CEO," he said. > > > > Dan Richman, a law professor at Columbia University, said Valukas had produced > > "a thorough and intensive report" that could prove invaluable to prosecutors > > and civil enforcement agencies like the Securities and Exchange Commission. > > > > "It certainly provides a very major assist to prosecutors trying to understand > > particularly complex transactions over a long period of time," Richman said. > > > > Several legal experts speculated that New York Attorney General Andrew Cuomo, > > who has not been shy about going after Wall Street and is widely expected to > > run for governor, may be the first law enforcement official to jump in. With > > New York's Martin Act, Cuomo has an especially potent tool at his disposal to > > combat financial fraud. > > > > The once-dormant law, which was enacted in 1921, was used by New York Attorney > > General Eliot Spitzer in bringing cases, both civil and criminal, in > > investigations of Wall Street research, mutual fund market timing and > > insurance brokers. > > > > Cuomo has deployed the law recently in pursuing a lawsuit against Bank of > > America Corp and its former chief executive, Kenneth Lewis, and former chief > > financial officer, Joe Price, accusing them of misleading shareholders about > > the bank's acquisition of Merrill Lynch & Co. > > > > A spokesman for Cuomo's office did not respond to a request for comment on > > Friday. > > > > "I think prosecutors are going to have a very difficult time NOT moving > > forward with criminal charges," Nowicki, of Boston University, said. > > > > "The reality is that this report, after experts and the media start going > > through and commenting on it, is going to stir up some level of public outrage > > that I don't think the SEC or the Department of Justice is going to want to > > ignore." > > > > > > ------ End of Forwarded Message >
