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17 March 2010

Valukas report on Lehman Brothers collapse


The just-published report by court-appointed examiner Anton Valukas concludes that the firm painted “a misleading picture of its financial condition” as it pursued questionable tactics to try to prevent its demise. E&Y, one of the big four, did not sound the alert.

Valukas released his account of the collapse . In it he accuses Lehman executives of hiding massive debt and bad investments in the run-up to its 2008 collapse that brought the financial system to a halt. Valukas writes that Lehman’s "conduct ranged from serious but nonculpable errors of business judgment to actionable balance sheet manipulation." He also blames the "investment bank business model, which rewarded excessive risk taking and leverage; and Government agencies, who by their own admission might better have anticipated or mitigated the outcome."
 
 




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