Post by jeffolie on Mar 12, 2010 13:13:18 GMT -6
Lehman/Geithner Fraud
Jail. Fraud should mean jail time,but instead Obama will probably reward Geithner with some kind of more permanent job appointment plus praise the SOB. Maddox got jail time, so should Geithner.
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Lehman Brothers hid borrowing, Geithner may bear some responsibility
By The Daily Caller 03/12/10 at 7:18 AM
Treasury Secretary Timothy Geithner testifies on Capitol Hill in Washington, Wednesday, March 10, 2010, before the House Financial Services subcommittee hearing on fiscal 2011 Treasury Department budget. The Federal Reserve, still dusting itself off from a fight that threatened to trim its powers, could emerge from a congressional overhaul of banking rules as the top cop over the nation's largest financial institutions. (AP Photo/Manuel Balce Ceneta)
A new report is out by the bank examiner hired by Lehman Brothers to assess the reasons for the financial company’s collapse and the final product is not pretty.
The New York Times reports:
“But the examiner, Anton R. Valukas, also for the first time, laid out what the report characterized as “materially misleading” accounting gimmicks that Lehman used to mask the perilous state of its finances. The bank’s bankruptcy, the largest in American history, shook the financial world. Fears that other banks might topple in a cascade of failures eventually led Washington to arrange a sweeping rescue for the nation’s financial system.
According to the report, Lehman used what amounted to financial engineering to temporarily shuffle $50 billion of troubled assets off its books in the months before its collapse in September 2008 to conceal its dependence on leverage, or borrowed money. Senior Lehman executives, as well as the bank’s accountants at Ernst & Young, were aware of the moves, according to Mr. Valukas, the chairman of the law firm Jenner & Block and a former federal prosecutor, who filed the report in connection with Lehman’s bankruptcy case.”
There’s another angle that the New York Times chose not to cover. Naked Capitalism notes that the NY Fed during the ‘financial misbehavior’ was being run by current Treasury Secretary Timothy Geithner:
“It also emerges that the NY Fed, and thus Timothy Geithner, were at a minimum massively derelict in the performance of their duties, and may well be culpable in aiding and abetting Lehman in accounting fraud and Sarbox violations.
We need to demand an immediate release of the e-mails, phone records, and meeting notes from the NY Fed and key Lehman principals regarding the NY Fed’s review of Lehman’s solvency. If, as things appear now, Lehman was allowed by the Fed’s inaction to remain in business, when the Fed should have insisted on a wind-down (and the failed Barclay’s said this was not infeasible: even an orderly bankruptcy would have been preferrable, as Harvey Miller, who handled the Lehman BK filing has made clear; a good bank/bad bank structure, with a Fed backstop of the bad bank, would have been an option if the Fed’s justification for inaction was systemic risk), the NY Fed at a minimum helped perpetuate a fraud on investors and counterparties.”
Read more: dailycaller.com/2010/03/12/lehman-brothers-hid-borrowing-geithner-may-bear-some-responsibility/#ixzz0hzUPoT3U
dailycaller.com/2010/03/12/lehman-brothers-hid-borrowing-geithner-may-bear-some-responsibility/
Jail. Fraud should mean jail time,but instead Obama will probably reward Geithner with some kind of more permanent job appointment plus praise the SOB. Maddox got jail time, so should Geithner.
====================================================
Lehman Brothers hid borrowing, Geithner may bear some responsibility
By The Daily Caller 03/12/10 at 7:18 AM
Treasury Secretary Timothy Geithner testifies on Capitol Hill in Washington, Wednesday, March 10, 2010, before the House Financial Services subcommittee hearing on fiscal 2011 Treasury Department budget. The Federal Reserve, still dusting itself off from a fight that threatened to trim its powers, could emerge from a congressional overhaul of banking rules as the top cop over the nation's largest financial institutions. (AP Photo/Manuel Balce Ceneta)
A new report is out by the bank examiner hired by Lehman Brothers to assess the reasons for the financial company’s collapse and the final product is not pretty.
The New York Times reports:
“But the examiner, Anton R. Valukas, also for the first time, laid out what the report characterized as “materially misleading” accounting gimmicks that Lehman used to mask the perilous state of its finances. The bank’s bankruptcy, the largest in American history, shook the financial world. Fears that other banks might topple in a cascade of failures eventually led Washington to arrange a sweeping rescue for the nation’s financial system.
According to the report, Lehman used what amounted to financial engineering to temporarily shuffle $50 billion of troubled assets off its books in the months before its collapse in September 2008 to conceal its dependence on leverage, or borrowed money. Senior Lehman executives, as well as the bank’s accountants at Ernst & Young, were aware of the moves, according to Mr. Valukas, the chairman of the law firm Jenner & Block and a former federal prosecutor, who filed the report in connection with Lehman’s bankruptcy case.”
There’s another angle that the New York Times chose not to cover. Naked Capitalism notes that the NY Fed during the ‘financial misbehavior’ was being run by current Treasury Secretary Timothy Geithner:
“It also emerges that the NY Fed, and thus Timothy Geithner, were at a minimum massively derelict in the performance of their duties, and may well be culpable in aiding and abetting Lehman in accounting fraud and Sarbox violations.
We need to demand an immediate release of the e-mails, phone records, and meeting notes from the NY Fed and key Lehman principals regarding the NY Fed’s review of Lehman’s solvency. If, as things appear now, Lehman was allowed by the Fed’s inaction to remain in business, when the Fed should have insisted on a wind-down (and the failed Barclay’s said this was not infeasible: even an orderly bankruptcy would have been preferrable, as Harvey Miller, who handled the Lehman BK filing has made clear; a good bank/bad bank structure, with a Fed backstop of the bad bank, would have been an option if the Fed’s justification for inaction was systemic risk), the NY Fed at a minimum helped perpetuate a fraud on investors and counterparties.”
Read more: dailycaller.com/2010/03/12/lehman-brothers-hid-borrowing-geithner-may-bear-some-responsibility/#ixzz0hzUPoT3U
dailycaller.com/2010/03/12/lehman-brothers-hid-borrowing-geithner-may-bear-some-responsibility/