E&Y sued over US Lehman audit

A US investment pool has sued Lehman executives and the auditor of Ernst
& Young for more than $150m (£101m) for fraud and misleading accounting

The San Mateo County Investment Pool has alleged that US Lehman’s executives
made public claims about the company’s financial strength, yet was privately
struggling for survival, reported Dow Jones.

Lehman attempted to conceal its losses with the help of Ernst & Young,
according to the suit signed by Joseph Cotchett, the lead counsel retained by
the county.

‘The defendants focused their efforts on trying to save their company and
their jobs with little or no regard to how their egregious actions harmed those
who in good faith invested in Lehman Brothers,’ said San Mateo County Counsel
Michael Murphy.

Lehman chief executive Richard S Fuld Jr, former CFOs Christopher M O’Meara
and Erin Callan, former president Joseph M Gregory, other directors and Ernst
& Young were named in the suit.

An Ernst & Young spokesman said in a statement: ‘The complaint has no
merit. Lehman Brothers’ demise was triggered by dramatic and unprecedented
market events that continue to be felt throughout the world.’

Lehman’s representatives were unavailable for comment at the time of writing.

Further reading:

CNN Money’s story

Related reading