No criminal or civil charges against top Lehman execs, five years after investment bank collapse
Almost exactly five years after the collapse of Lehman Brothers nearly sank the U.S. economy, regulators of the banking industry remain concerned that the country’s six largest lending institutions may still be undercapitalized even though their reserves have nearly doubled since then.
“The basic model hasn’t changed much, and it’s still fragile,” economics professor Anil Kashyap of the University of Chicago’s Booth School of Business told Bloomberg. “The banks need much more capital and liquidity. They’re still way short of being safe.”
Meanwhile, it appears that top Lehman executives not only won’t be criminally prosecuted in any way but won’t face any civil charges by the Securities and Exchange Commission concerning the biggest bankruptcy in U.S. history, reports the DealBook page of the New York Times (reg. req.) in an article that relies on some anonymous sources.
Chairman Anton R. Valukas of Jenner & Block served as a bankruptcy examiner in the case and said in a report that Lehman Brothers had manipulated its balance sheet. “There were many instances where the SEC had information and didn’t act,” he told the Times.
However, the feds, after further investigation, determined that the accounting practices he focused on were, in fact, legal and were not material to the famed investment bank’s failure, the newspaper reports.
A spokesman for the SEC declined to comment specifically about the Lehman investigation. In general, “There are healthy discussions and debate about legal and factual issues at many levels of the agency in investigations of significance,” the spokesman said. “But in the end decisions are based on the evidence and the law.”
See also:
ABAJournal.com: “Jenner Chair Anton Valukas Talks with ‘60 Minutes’ About Lehman Brothers ‘Shell Game’”
