The New York Observer interviewed two former Lehman Brothers executives, who gave their view on the recently published 2,200 page which revealed that the firm moved around $50bn from its balance sheet in the first two quarters of 2008.
Here are some of their priceless comments:
1. 'When I read this, I giggle a little bit. Because $50bn is a shitload of money, but in the scheme of things...is a drop in the ocean'.
2. 'When you spend what you spend on this report ($38.4m), and you go through a firm for a year, and this is all you find ? That's amazing'.
3. 'If Valukas (the report's author) went into Goldman Sachs, what do you think the report would look like ?'
In the meantime, The New York Times reports that the House Financial Services Committee is to hold hearings on the report findings (no surprise there). Rep Spencer Bachus said in a letter requesting a hearing that: 'Either the SEC and the New York Fed failed to discover the ongoing accounting fraud at Lehman, or they turned a blind eye'.
And Bloomberg reports that SEC Chairman Mary Shapiro has come out and admitted that her agency oversight of Lehman was 'flawed in design and execution'.
The Financial Times also reports that the SEC was tipped off that Lehman may have been engaging in dodgy accounting practices by no less a source than Merrill Lynch. According to the newspaper's sources, in early 2008 certain Merrill officials contacted the regulator to express concerns that Lehman may have been involved in some accounting shenanigans and was obtaining a competitive advantage as a result.
Finally, Reuters reports that Lehman Brothers Holdings has now accused Barclays Capital of receiving a $13bn 'windwall' on the deal to acquire the firm's American operations just after bankruptcy. Barclays acknowledges that it had a 'one-day' accounting gain of $4.2bn. The spat looks likely to end in court, with a hearing set for April 9th.