Lehman ap 22

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Ernst & Young

1. Financial Crisis Cases Sputter to an End

   Apr 20, 2015 | The New York Times - Dealbook

   By Peter J. Henning
   
   
   ...In the other case, the New York State attorney general, Eric T. Schneiderman, reached a $10 million settlement of accounting fraud charges against Ernst & Young for its role as the auditor for Lehman Brothers, whose collapse in September 2008 in the largest bankruptcy in American history ignited the near meltdown of the financial system...

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Client Attorney Privileged/Attorney Work Product/At Request of Counsel

Ernst & Young

1. Financial Crisis Cases Sputter to an End

   Apr 20, 2015 | The New York Times - Dealbook

   By Peter J. Henning

   Yogi Berra once said that “it ain’t over ‘til it’s over.” Unlike the final out or winning run in a baseball game, determining when cases arising from the 2008 financial crisis will end is a bit harder to discern. But the resolution of two cases last week clearly indicates that enforcement actions for conduct leading up to the crisis are pretty much done, with no real finding of liability for violations.

   In one case, the Securities and Exchange Commission resolved fraud charges against Richard F. Syron, the former chief executive of the mortgage giant Freddie Mac, and two other senior executives related to statements regarding the company’s exposure to subprime mortgages. The case did not even end with the usual settlement in which the defendants neither admitted nor denied liability. Instead, it concluded only with an acknowledgment “that no party is the prevailing party.”
   

   In the other case, the New York State attorney general, Eric T. Schneiderman, reached a $10 million settlement of accounting fraud charges against Ernst & Young for its role as the auditor for Lehman Brothers, whose collapse in September 2008 in the largest bankruptcy in American history ignited the near meltdown of the financial system. Although Mr. Schneiderman asserted that the resolution showed that auditors can be held accountable for violations, DealBook reported the accounting firm’s statement that “after many years of costly litigation, we are pleased to put this matter behind us, with no findings of wrongdoing by E.Y. or any of its professionals.”

   Both cases took direct aim at conduct at the center of the financial crisis, and neither yielded anything close to a finding of actual wrongdoing.

   The S.E.C. dropped its investigation into Lehman Brothers in 2012 despite an extensive report by Anton R. Valukas that concluded that management was aware of accounting maneuvers used to make its finances look stronger than they were. No one at the firm ever faced a civil action, much less criminal charges, and the modest payment by Ernst & Young looks more like a nuisance settlement...

   For full story:

   http://www.nytimes.com/2015/04/21/business/dealbook/financial-crisis-cases-sputter-to-an-end.html?_r=0
   

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