AN INQUIRY into the Lehman Brothers collapse found “credible evidence” that executives such as former chief Dick Fuld approved misleading financial statements and used an “accounting gimmick” to flatter results.
Court-appointed examiner Anton Valukas said there was enough evidence to claim that Ernst Young, Lehman’s auditors, failed to “question and challenge improper or inadequate disclosures” in the firm’s results.
The examiner found Lehman’s management had not breached its fiduciary duty to shareholders during the financial crisis.
The 2,200-page report, released by US bankruptcy judge James Peck, found some evidence to pursue a claim that JPMorgan Chase and Citigroup might have contributed to Lehman’s slide into bankruptcy in September 2008 by demanding collateral from the bank in the run-up to its failure.
The report notes evidence that executives failed to disclose an accounting device enabling the bank to hold $50 billion (€36.3 billion) in leverage off its balance sheet. – (Copyright The Financial Times Limited 2010)
