SFO examines Lehman issues

The Serious Fraud Office has reportedly taken steps to examine issues
connected to the collapse of Lehman Brothers and the accounting behind the
crisis at the bank.

A report published by US bankruptcy examiner Anton Valukas ten days ago
claimed executives at the bank has used accounting for so called Repo 105
transactions to obscure the true state of the bank’s balance sheet.

The report alleged auditors Ernst & Young were negligent in their
handling of the issue while working on the bank’s accounts.

quotes an unnamed SFO source saying that the Lehman case “looks” regulatory but
it would be “remiss” of the investigators not to gather some information. No
official investigation has been opened.

The report claims the SFO has been in touch with “counterparts” in the US and
“put down markers” with regulators in the UK including the Financial Services
Authority and the Financial Reporting Council. The report does not explain what
that means.

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