03/15/10 Stockholm, Sweden – 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?
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…
For a great description of the report findings in useful detail view The Dylan Ratigan Show video clip below.
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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…”
Best,
Rocky Vega,
The Daily Reckoning
Rocky Vega
Rocky Vega is publisher of The Daily Reckoning. Previously, he was founding publisher of UrbanTurf and RFID Update, which he operated from Brazil, Chile, and Puerto Rico, and associate publisher of FierceFinance. He specialized in direct marketing at MBI, facilitated MIT Sloan School of Management programs, and has been featured on CBS. Vega graduated with honors from Harvard University, where he was on the board of Let’s Go Publications and directed business programs involving McKinsey, Goldman Sachs, and Harvard Business School faculty. He is also enrolled at the Stockholm School of Economics.
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The longer time goes by and no significant indictments on this fraud and others that were perpetuated against the US and peoples around the world, the bigger the s**tstorm that will ensue once all this dirty laundry ultimately has to be cleaned up.
Lets hope someone with some balls will step up to the plate and clean house.
LET ME GET A ROPE AND SOME HOT TAR AND FEATHERS
When are the similar reports coming out on AIG, BofA, Citibank, GS coming out?
Here is where we could ‘Stimulate’ the Economy, By building a 500 Acre ‘Tent City’ out in the Middle of the Nevada Desert.
In fact, I think I will build a 50 Square Mile Prison in the Middle of the Nevada Desert and Charge each State $50K per year, Per Prisoner, to house them.
Build a small airport, bada bing!