Sat Mar 23, 2024 11:33 pm by globalturbo
Lehman Brothers CEO Arrested For Accounting Fraud
January 16th, 2013
Former Lehman Brothers CEO Dick Fuld
and three other Lehman executives were arrested today for crimes
related to the collapse of the venerable investment bank in September
2008.
The four bankers were apprehended at John F. Kennedy International
Airport in New York where they were attempting to flee the country to
escape imminent federal charges of filing false financial statements.
According to multiple sources Ferdinand Pecora - the U.S. District
Attorney for the Southern District of New York - obtained a grand
jury indictment last week against Fuld, former CFO Erin Callen and two lower level accounting managers.
The indictment alleged that the four knowingly deceived investors and regulators over Lehman's use of its infamous "Repo 105" accounting techniques, concealing the firm's true financial condition until it was too late.
Although this Repo 105 accounting fraud had been widely reported
in the media, no arrests had been made until now. Some experts have
argued that the transactions were deceitful, but not unlawful. However,
according to the grand jury report clear evidence exists on violations
of the Sarbanes-Oxley Act and other applicable laws.
The Greediest Guys in the Room
Word of the secret indictment was illegally leaked to Fuld and his
associates over the weekend. Fearing a public trail
and imprisonment, the group hatched a plan to escape to Russia - which
does not have a extradition treaty with the United States.
The FBI arrested the Lehman Four on a scheduled Aeroflot flight, just
minutes before it was set to take off for Moscow - where the
still-wealthy Fuld and his associates thought they had arranged to live
comfortably in exile.
In reality, however, the trip to Russia was part of an elaborate
effort by authorities to locate Fuld and his group, who had
disappeared from FBI surveillance and adopted a false identities.
Federal officials posing as corrupt Swiss real estate agents helped
Fuld find and purchase a safe-house in Moscow, and then used the his
financial information to trace his movements.
As one proud agent explains:
"Basically we sold him a fake house, and then lured him to it."
De Maxima Non Curat Lex
Lehman Brothers was once one of the world's largest financial firms.
It collapsed spectacularly in the fall of 2008 after a series of risky
bets it made on the American housing market soured and left it
with insufficient capital.
Although the problems at Lehman were not vastly unlike those at other
investment banks, its use of aggressive accounting methods to hide its
losses were perhaps the most egregious.
Following the arrests Gregor MacGregor,an attorney for Fuld, defended his client in a written statement that lambasted the prosecutor for daring to bring such charges:
"Although Mr. Fuld recklessly bankrupted his company and brought the
world to the brink of global financial collapse, we believe that
technically none of that was actually illegal."
"This prosecution is nothing but a politically motivated witch
hunt designed to mask the failures of our leaders in Washington. Who can
blame Mr. Fuld for wanting to escape this Kangaroo Court and go
someplace where the rule of law is respected and revered?"
Criticism also came from powerful banking lobby groups in Washington
D.C. Tim Pawlenty, a former Minnesota governor and chairman of the Financial Services Roundtable expressed his outrage at the move:
"I don't mind being tough on crime. But I would prefer if the
government stuck to prosecuting black and Latino people for drug
offenses. Going after Wall Street kingpins, who heavily donate to
political campaigns, seems ungrateful and in poor taste."
However, Pecora - who is expected to unveil the full indictment Friday - says his investigation is vital to American democracy:
"If we don't vigorously prosecute those criminally responsible for
the greatest financial crisis since the Great Depression, how can expect
to be taken seriously as a nation?"
Share on twitterShare on facebookShare on tumblrShare on linkedinShare on redditShare on email
Thanks to: http://dailycurrant.com
January 16th, 2013
Former Lehman Brothers CEO Dick Fuldand three other Lehman executives were arrested today for crimes
related to the collapse of the venerable investment bank in September
2008.
The four bankers were apprehended at John F. Kennedy International
Airport in New York where they were attempting to flee the country to
escape imminent federal charges of filing false financial statements.
According to multiple sources Ferdinand Pecora - the U.S. District
Attorney for the Southern District of New York - obtained a grand
jury indictment last week against Fuld, former CFO Erin Callen and two lower level accounting managers.
The indictment alleged that the four knowingly deceived investors and regulators over Lehman's use of its infamous "Repo 105" accounting techniques, concealing the firm's true financial condition until it was too late.
Although this Repo 105 accounting fraud had been widely reported
in the media, no arrests had been made until now. Some experts have
argued that the transactions were deceitful, but not unlawful. However,
according to the grand jury report clear evidence exists on violations
of the Sarbanes-Oxley Act and other applicable laws.
The Greediest Guys in the Room
Word of the secret indictment was illegally leaked to Fuld and his
associates over the weekend. Fearing a public trail
and imprisonment, the group hatched a plan to escape to Russia - which
does not have a extradition treaty with the United States.
The FBI arrested the Lehman Four on a scheduled Aeroflot flight, just
minutes before it was set to take off for Moscow - where the
still-wealthy Fuld and his associates thought they had arranged to live
comfortably in exile.
In reality, however, the trip to Russia was part of an elaborate
effort by authorities to locate Fuld and his group, who had
disappeared from FBI surveillance and adopted a false identities.
Federal officials posing as corrupt Swiss real estate agents helped
Fuld find and purchase a safe-house in Moscow, and then used the his
financial information to trace his movements.
As one proud agent explains:
"Basically we sold him a fake house, and then lured him to it."
De Maxima Non Curat Lex
Lehman Brothers was once one of the world's largest financial firms.
It collapsed spectacularly in the fall of 2008 after a series of risky
bets it made on the American housing market soured and left it
with insufficient capital.
Although the problems at Lehman were not vastly unlike those at other
investment banks, its use of aggressive accounting methods to hide its
losses were perhaps the most egregious.
Following the arrests Gregor MacGregor,an attorney for Fuld, defended his client in a written statement that lambasted the prosecutor for daring to bring such charges:
"Although Mr. Fuld recklessly bankrupted his company and brought the
world to the brink of global financial collapse, we believe that
technically none of that was actually illegal."
"This prosecution is nothing but a politically motivated witch
hunt designed to mask the failures of our leaders in Washington. Who can
blame Mr. Fuld for wanting to escape this Kangaroo Court and go
someplace where the rule of law is respected and revered?"
Criticism also came from powerful banking lobby groups in Washington
D.C. Tim Pawlenty, a former Minnesota governor and chairman of the Financial Services Roundtable expressed his outrage at the move:
"I don't mind being tough on crime. But I would prefer if the
government stuck to prosecuting black and Latino people for drug
offenses. Going after Wall Street kingpins, who heavily donate to
political campaigns, seems ungrateful and in poor taste."
However, Pecora - who is expected to unveil the full indictment Friday - says his investigation is vital to American democracy:
"If we don't vigorously prosecute those criminally responsible for
the greatest financial crisis since the Great Depression, how can expect
to be taken seriously as a nation?"
Share on twitterShare on facebookShare on tumblrShare on linkedinShare on redditShare on email
Thanks to: http://dailycurrant.com
