Lehman Top Executives to Face Criminal Charges

Anton Valukas, the examiner appointed by the Bankruptcy Court to audit Lehman Brothers books, released yesterday his report of Lehman's Road to Bankruptcy. This detailed report cites many deliberate material misstatements the firm made in securities filings and public statements about its financial condition that former CEO Richard Fuld and former CFO Erin Callan will almost certainly face criminal charges, and former CFOs Chris O'Meara and Ian Lowett could face charges as well.

After Valukas detailed and footnoted these instances in the millions of pages he reviewed and the 100+ interviews he conducted. Based on this it is hard to see how the top executives can avoid being convicted.

Richard Fuld has claimed he knew little about the "repo 105 transactions" which are at the core of the fraud. These transactions clearly lied about the financial status of Lehman Brothers and were used for over 2 years to hide troubles at Lehman. Sorry Richard but I don't buy your excuse and it appears that the Justice Department doesn't buy it as well.

Ernst and Young, the accounting firm charged with verifying the financial books of Lehman could also face a malpractice lawsuit by creditors for failure to audit these fraudulent transactions, although they will escape any criminal charges.

In all the top executives are all likely to be indicted and possibly convicted of Federal Securities Fraud. I can only hope no plea bargain deal comes out, as I for one would like to see these crooks thrown in jail! Let's hope more firms are audited and more executives are jailed as well. Wall Street is a greedy place whose greed has brought so much grief to main street American that they all deserve to go to prison. Well that's my opinion anyway.