Lehman bosses criticised for crash
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The chiefs of Lehman Brothers have been criticised for misleading financial statements and accounting gimmicks in the lead up to its bankruptcy in 2008.
In a report to the New York Bankruptcy Court by examiner Anton Valukas, it was revealed that the investment bank was insolvent weeks before it announced bankruptcy on September 15 2008.
It blames the auditors Ernst and Young for account “gimmicks” and also blames executives including former chief executive Dick Fuld for exacerbating the problems the firm faced with “serious but non-culpable errors”. The report says this may lead to legal action against the executives and Ernst and Young for its “negligence”.
The report says Lehman Brothers was slow to see the impending sub-prime mortgage “storm” and thought it could buy its way out of trouble. After the demise of Bear Stearns the report says Lehman pained a “misleading picture of its financial condition”.
The report also confirms that Barclays was set to buy out Lehman a day before its crashed, but the move was sanctioned by the FSA.
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