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Lehman Ap 17
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Algorithmic and Artisanal IPOs
Apr 16, 2015 | Bloomberg View
By Matt Levine
...One popular theory of the collapse of Lehman Brothers is that it used an accounting trick called "Repo 105" to disguise its leverage, fooling investors into thinking it was less risky than it actually was. It's weird that this theory has never fared all that well in court. Lehman's collapse was Bad, and disguising risk is Bad, and there's been, what, seven .. -
EY's US Arm to Pay $10M to Settle a NY Lawsuit Over Lehman Audit
Apr 16, 2015 | AccountancyAge
By Chris Warmoll
EY's US ARM has agreed to stump up $10m (£6.7m) to settle a New York lawsuit over accusations it helped Lehman Brothers Holdings deceive investors prior to its 2008 collapse. The Big Four firm's audit arm was accused of enabling the disgraced investment bank of temporarily removing tens of billions of dollars of securities from its balance... -
EY Agrees to Settlement of Lehman Auditing Suit
Apr 16, 2015 | CFO
By Matthew Heller
After more than four years of litigation, Ernst & Young has agreed to pay $10 million to settle New York State allegations that its auditors helped Lehman Brothers Holdings mislead investors before the investment bank collapsed in 2008. The case was the only one brought by a law enforcement agency over Lehman’s demise, which... -
EY Becomes First And Only Organisation To Pay Fine Over Lehmans Role
Apr 16, 2015 | The Global Legal Post
By Neasa MacErlean
Big Four accountant Ernst & Young is to pay US$10m over its role as auditor to Lehman Brothers, the bank which failed in 2008 - and, for the time being at least, it looks likely to remain the only adviser to take a penalty from the regulators. The practice agreed to pay the penalty in a settlement with the Attorney General of New York State. -
EY Pays $10M Over Lehman Accounting
Apr 16, 2015 | Economia
By Raymond Doherty
The agreement resolves allegations the firm enabled the bank to paint a false picture of it financial statements by temporarily removing tens of billions of dollars of securities form its balance sheet without disclosing those transaction on financial statements. Lehman Brothers collapsed with debts of more than £391bn in 2008... -
When Life Gives You Lehman’s: Ernst & Young Fined $10 Million for Finessing Failed Bank’s Accounting
Apr 16, 2015 | Jewish Business News
By Vered Weiss
Ernst & Young will pay $10 million for its role in assisting failed bank Lehman Brothers in concealing its amount of debt and is financial problems, according to the Financial Times. The Lehman collapse in 2008 led to a wave of bank failures and falling stock prices that coincided with the worst financial crisis in the U.S. since the Great Depression. -
Ernst & Young Fined $10M Over Lehman Audits
Apr 17, 2015 | Professional Advisor
Sponsored by Ernst & Young (EY) has paid $10m to settle claims it was negligent in it duty as auditor when it failed to raise the alarm when Lehman Brothers was heading towards collapse. The settlement marks the end of a four-year legal fight, and is the first successful action by a law enforcement authority in connection with Lehman's...
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Ernst & Young
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Algorithmic and Artisanal IPOs
Apr 16, 2015 | Bloomberg View
By Matt Levine
Some earnings.
Let's see. Goldman Sachs had a good quarter, making $5.94 a share versus $4.26 estimates, with a 10 percent increase in fixed-income trading revenue, perhaps validating Goldman's commitment to trading even as some rivals back away.
...Some Lehman stuff.
One popular theory of the collapse of Lehman Brothers is that it used an accounting trick called "Repo 105" to disguise its leverage, fooling investors into thinking it was less risky than it actually was. It's weird that this theory has never fared all that well in court. Lehman's collapse was Bad, and disguising risk is Bad, and there's been, what, seven years of calls to lock up bankers for the financial crisis, and it always seemed like Lehman was the obvious place to start. But no one has ever gotten in all that much trouble for Repo 105. The latest trouble is a $10 million settlement between Ernst & Young, Lehman's auditor, and the New York State Attorney General, for approving Lehman's accounts "in spite of knowing that Lehman was not disclosing the existence or impact of the Repo 105s." I don't know, $10 million to settle a four-year-old lawsuit over the key moment of the financial crisis, it's kind of an anticlimax, especially since E&Y settled with private investors for $99 million in 2013, and this settlement will just bump up the investor recovery in that case slightly. E&Y shrugged it off:
Ernst & Young noted that the settlement didn’t include any findings of wrongdoing by the firm or any of its professionals. “After many years of costly litigation we are pleased to put this matter behind us,” Ernst & Young said in a statement...
For full story:
http://www.bloombergview.com/articles/2015-04-16/algorithmic-and-artisanal-ipos
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EY's US Arm to Pay $10M to Settle a NY Lawsuit Over Lehman Audit
Apr 16, 2015 | AccountancyAge
By Chris Warmoll
EY's US ARM has agreed to stump up $10m (£6.7m) to settle a New York lawsuit over accusations it helped Lehman Brothers Holdings deceive investors prior to its 2008 collapse.
The Big Four firm's audit arm was accused of enabling the disgraced investment bank of temporarily removing tens of billions of dollars of securities from its balance sheet, creating an illusion of sound financial health, Bloomberg reports.
Further reading Lehman Bros Europe creditors to receive second dividend Lehman Brothers pension scheme payout agreed
New York Attorney General Eric Schneiderman said yesterday that "auditors will be held accountable when they violate the law, just as they are supposed to hold the companies they audit accountable."
An EY spokesman said in statement that it is "pleased to put this matter behind us" and that there were "no findings of wrongdoing" by the firm or its staff.
Andrew Cuomo, the attorney general in 2010, accused the firm of facilitating a "major accounting fraud" by helping Lehman deceive the public about its financial condition in the lawsuit.
The state had sought as much as $125m professional fees that EY collected from 2001 through the 2008 bankruptcy, along with damages for Lehman shareholders, according to court filings.
With help from EY, Lehman allegedly used Repo 105 transactions to help conceal debt. Lehman, according to a bankruptcy examiner's report, used Repo 105 transactions as a form of short-term financing to temporarily move up to $50bn off its balance sheet...
For full story:
http://www.accountancyage.com/aa/news/2404350/eys-us-arm-to-pay-usd10m-to-settle-a-ny-lawsuit-over-lehman-audit
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EY Agrees to Settlement of Lehman Auditing Suit
Apr 16, 2015 | CFO
By Matthew Heller
After more than four years of litigation, Ernst & Young has agreed to pay $10 million to settle New York State allegations that its auditors helped Lehman Brothers Holdings mislead investors before the investment bank collapsed in 2008.
The case was the only one brought by a law enforcement agency over Lehman’s demise, which helped precipitate the 2008 financial crisis. The New York attorney general sued E&Y in December 2010, alleging it facilitated a “massive accounting fraud” that made Lehman’s balance sheet appear healthier and less risk-laden than it actually was.
The $10 million settlement was well short of what the attorney general had sought, but E&Y previously agreed to pay $99 million in damages to investors to resolve a class-action suit.
“If auditors issue opinions that are unreliable or provide cover for their clients by helping to hide material information, that harms the investing public, our economy, and our country,” Attorney General Eric T. Schneiderman said in a news release. “Auditors will be held accountable when they violate the law, just as they are supposed to hold the companies they audit accountable.”
Lehman filed for bankruptcy on Sept. 15, 2008. According to the New York complaint, the alleged accounting fraud involved Lehman’s use of a mechanism known as “Repo 105” that removed tens of billions of dollars of debt from its balance sheet to make its leverage ratio appear healthier at the close of financial quarters...
For full story:
http://ww2.cfo.com/auditing/2015/04/ey-agrees-settlement-lehman-auditing-suit/
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EY Becomes First And Only Organisation To Pay Fine Over Lehmans Role
Apr 16, 2015 | The Global Legal Post
By Neasa MacErlean
Big Four accountant Ernst & Young is to pay US$10m over its role as auditor to Lehman Brothers, the bank which failed in 2008 - and, for the time being at least, it looks likely to remain the only adviser to take a penalty from the regulators.
The practice agreed to pay the penalty in a settlement with the Attorney General of New York State. EY's was accused, as auditor, of approving an accounting treatment which kept billions of dollars of short-term financing off the balance sheet, thus hiding the true position of the investment bank before it went bankrupt in 2008. As auditor, it was accused of not protesting when Lehman allegedly misled analysts. It is also accused of not relaying the concerns of a whistleblower...
For full story:
http://www.globallegalpost.com/big-stories/ey-becomes-first-and-only-organisation-to-pay-fine-over-lehmans-role-20668445/
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EY Pays $10M Over Lehman Accounting
Apr 16, 2015 | Economia
By Raymond Doherty
The agreement resolves allegations the firm enabled the bank to paint a false picture of it financial statements by temporarily removing tens of billions of dollars of securities form its balance sheet without disclosing those transaction on financial statements.
Lehman Brothers collapsed with debts of more than £391bn in 2008, sparking worldwide financial panic.
"The basic duty and legal obligation of auditors is to ensure that the public companies they audit provide reliable and unbiased information about their operations to the investing public," Attorney General Eric T. Schneiderman said.
"If auditors issue opinions that are unreliable or provide cover for their clients by helping to hide material information, that harms the investing public, our economy, and our country."
Under the terms of the settlement, EY will pay $10m (£6.7m) - most of which will go to investors, with the remaining settlement funds to be used to reimburse New York State for investigation and litigation costs.
In a statement, Ernst & Young said, “After many years of costly litigation we are pleased to put this matter behind us, with no findings of wrongdoing by EY or any of its professionals.”
For full story:
http://economia.icaew.com/news/april-2015/ey-pays-10m-over-lehman-accounting
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When Life Gives You Lehman’s: Ernst & Young Fined $10 Million for Finessing Failed Bank’s Accounting
Apr 16, 2015 | Jewish Business News
By Vered Weiss
Ernst & Young will pay $10 million for its role in assisting failed bank Lehman Brothers in concealing its amount of debt and is financial problems, according to the Financial Times. The Lehman collapse in 2008 led to a wave of bank failures and falling stock prices that coincided with the worst financial crisis in the U.S. since the Great Depression.
Ernst & Young approved of Lehman’s accounting for financing, allowed it to keep billions off its balance sheets and stood by while management made misleading statements to analysts. It also failed to inform an audit committee about problems. NY attorney general Eric Schneiderman told the Financial Times, “If auditors issue opinions that are unreliable or provide cover for their clients by helping to hide material information, that harms the investing public, our economy and our country.”
Schneiderman intended to sue for $150 million, to be distributed among former shareholders of Lehman Brothers, but had to settle for $10 million after it paid a $99 million settlement last year...
For full story:
http://jewishbusinessnews.com/2015/04/16/when-life-gives-you-lehmans-ernst-young-fined-10-million-for-finessing-failed-banks-accounting/
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Ernst & Young Fined $10M Over Lehman Audits
Apr 17, 2015 | Professional Advisor
Sponsored by Ernst & Young (EY) has paid $10m to settle claims it was negligent in it duty as auditor when it failed to raise the alarm when Lehman Brothers was heading towards collapse.
The settlement marks the end of a four-year legal fight, and is the first successful action by a law enforcement authority in connection with Lehman's bankruptcy, the Teleraph said, quoting the New York attorney general said.
Central to the investigation was Lehman's use of Repo 105, an accounting device within the firm that allowed it to temporaily sell securities to shift risk off its balance sheet.
The transactions lasted no longer than a few days, enabling Lehman to remove tens of billions of dollars from its balance sheet without triggering a reporting requirement.
EY failed to object to Lehman using this technique to mislead investors about its liquidity and financial health, the attorney general said.
Lehman filed to bankruptcy on September 15, 2008, heralding the beginning of the international financial crisis...
For full story:
http://www.professionaladviser.com/professional-adviser/news/2404490/ernst-young-fined-usd10m-over-lehman-audits
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Ernst & Young
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