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Dec 22

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E&Y Deserves its Lehman Trouble

New York Attorney General and Governor-elect Andrew Cuomo filed a lawsuit against Ernst & Young.  The suit charges Ernst & Young with helping Lehman Brothers engage in accounting fraud involving “the surreptitious removal of tens of billions of dollars of securities from Lehman’s balance sheet to create a false impression of Lehman’s liquidity, thereby defrauding the investing public”.  Ernst & Young was Lehman’s outside auditor, and certified the Lehman’s financial statements from 2001 until Lehman filed for bankruptcy in September 2008.

 The 32-page complaint, filed in New York Supreme Court, follows the more detailed claims made in a 2,200-page report by Lehman’s bankruptcy court examiner.  In Examiner Fingers Lehman’s Management And Outside Auditor For Serious Accounting Misreporting, we provide a summary and analysis of the serious charges associated with Lehman’s fraudulent financial reporting and Ernst & Young’s exposure relating thereto.  In light of the Examiner’s findings, this lawsuit is not really surprising.

About the author

David Nolte

I am a founding principal of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA) and an Accredited Senior Appraiser (ASA), as well as having other professional credentials. I regularly serve as an expert witness involving damages measurement. My litigation-oriented resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2010/12/ey-deserves-its-lehman-trouble/

1 comment

  1. Gracelynn

    Extremely helfupl article, please write more.

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