Cuomo Sues Ernst & Young

[The Straight Story]

New York Attorney General Andrew Cuomo filed a lawsuit against Ernst & Young for civil fraud Tuesday, accusing one of the nation's largest accounting firms of helping Lehman Brothers Holdings Inc. hide its financial weakness from investors for about seven years before the bank finally collapsed in September of 2008.

Ernst & Young knew about, supported and advised Lehman on its "Repo 105" transactions, a type of debt the bank took on, but labeled as sales, which made the firm appear to investors less risky than it really was, according to the complaint. The audit firm also stood by while Lehman misled analysts and investors on conference calls and in financial filings about its levels of risk, particularly after the firm's stability began to crack after the credit crisis began in 2007, said the complaint.

"Ernst & Young substantially assisted Lehman Brothers Holdings Inc., now bankrupt, to engage in a massive accounting fraud," Mr. Cuomo wrote in his complaint.

Ernst & Young declined to comment.

The accounting firm blessed Lehman's Repo 105 transactions from the time Lehman became one of the firm's most prominent clients in 2001, Mr. Cuomo said in his complaint. The accounting firm collected over $150 million in fees from Lehman between 2001 and 2008, he said in the complaint



http://online.wsj.com/article/SB10001424052748704259704576033540546160536.html?mod=WSJ_hp_LEFTTopStories

[Renew Deal]

1. Why wouldn't he leave that for Shneiderman?

Schneiderman takes over in 11 days.

[Lint Head]

2. These rich pricks will pay a fine and move on.

Until we have fines for assholes like these in the billions it is just the price of doing business.

[Pacifist Patriot]

3. Sadly yes.