Lehman Brothers examiner says it could happen again [View all]

[Bozita]

It Could Happen Again
Tony Valukas, the Lehman Brothers examiner, on the continuing lack of oversight for financial institutions.
Drew Combs ContactAll Articles
The American LawyerFebruary 29, 2012


Two years ago, Anton Valukas issued a 2,200-page report that laid bare the accounting gimmicks that hid Lehman Brothers Holding, Inc.'s shaky finances. Valukas, the chair of Jenner & Block, had been hired 14 months earlier as the examiner in the bankruptcy of the 158-year-old former financial industry stalwart. Since then, class action settlements totaling $515 million, including $90 million stemming from a suit against Lehman's directors and officers, have been reached. And although the New York attorney general is pursuing fraud claims against Lehman's auditor, Ernst & Young, the Securities and Exchange Commission hasn't filed any charges against any individuals in connection to Lehman's collapse. Senior reporter Drew Combs caught up with Valukas to get his take on the fallout from the examiner's report and efforts to reform the financial services industry.

Are you disappointed that in the aftermath of your report, the Securities and Exchange Commission hasn't brought any claims against Lehman executives and others whose actions were scrutinized in the report?

No. Our role as examiner was not to find villains or lay the foundations for lawsuits. There was information that caused us to conclude that there were colorable claims that the company's financial statements were misleading. Whether the SEC thinks there is a claim worth bringing is something it will have to decide.

About four months after your report was released, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law. Are you satisfied with the pace and amount of reform that has taken place?

I have not been satisfied with reform [of the financial services industry]. Dodd-Frank has set up a framework for reform, but it is not clear that those regulations are going to have any teeth. There is a battle going on in which certain interests are attempting to prevent meaningful reform. What happened in Lehman Brothers could happen again.

more...
http://www.law.com/jsp/tal/PubArticleTAL.jsp?id=1202543064328&It_Could_Happen_Again&slreturn=1