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Ear to the Ground

Lehman Execs May Escape Charges

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Posted on Mar 12, 2011
Richard Fuld Jr.
World Economic Forum / Remy Steinegger

Who, me? Former Lehman CEO Richard Fuld Jr.

Officials at the SEC have begun to doubt that the agency can prove that executives of the now-defunct Lehman Brothers investment bank broke the law after the company allegedly moved billions of dollars off its balance sheet.

If Lehman Brothers executives do escape prosecution, it will only add to a long list of Wall Street wheeler-dealers who have found a way to avoid punishment. —JCL

Reuters:

A government probe into the fall of Lehman Brothers Holdings Inc has hit so many snags that enforcement officials fear they may never be able to bring civil or criminal charges against company executives, the Wall Street Journal reported on Saturday.

According to the paper, Securities and Exchange Commission officials have begun to doubt they can prove that Lehman broke U.S. laws by moving nearly $50 billion in assets off its balance sheet to make it appear that the securities firm had lowered its debt burden.

Quoting people familiar with the situation, the Journal said SEC officials are also worried they might not win any lawsuit against former Lehman Chief Executive Richard Fuld Jr accusing him of improperly accounting for the value of a large real estate portfolio acquired with the takeover of Archstone-Smith Trust, or to hide losses to investors related to that deal.

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Shenonymous's avatar

By Shenonymous, March 14, 2011 at 10:02 am Link to this comment

Are you suggesting, jwn, that it takes a thief to catch a thief? 
Well maybe only metaphorically, or maybe by association, eh? 
Regarding Storch, who became the COO of the SEC’s “enforcement”
division, (taken from CBS News, Oct. 16, 2009):  “Before joining
Goldman Sachs, Storch was a senior consultant at accounting firm
Deloitte & Touche. He is a certified public accountant and certified
fraud examiner,
and has an MBA from New York University and
bachelors of science in business administration from the State
University of New York in Buffalo.”  Are those, in spite of his youth, 
not good enough credentials to be an enforcer?  Or are you suggest-
ing that because he’s “from the industry,” he necessarily would be
sympathetic to the industry and not be as aggressive in enforcement
as some one else might be?

“Storch has a strong background in technology systems and project
management,” SEC Enforcement Director, Robert Khuzami said in a
statement. “He will help to make us more efficient and nimble, and
permit us to put more of our investigators on the front lines to detect
and stop fraud,” Khuzami said.

At what other significance of this appointment are you hinting?  Do you
have a better suggestion and if so, have you sent your suggestion, or
reservation about Storch, to Khuzami to whom Storch reports?

Report this

By jwn, March 13, 2011 at 6:46 pm Link to this comment
(Unregistered commenter)

Remember this key SEC appointment back in the fall of
2009.

“Adam Storch - 29-Year Old Goldman Guy Who Is Now COO
Of The SEC”

http://www.businessinsider.com/found-photo-of-adam-
storch-29-year-old-goldman-guy-who-is-now-coo-of-the-
sec-2009-10

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Shenonymous's avatar

By Shenonymous, March 13, 2011 at 2:51 pm Link to this comment

Well the truth is SEC officials have grown more and more worried
they would lose the legal battle through the courts if they brought
civil charges that allege Lehman investors were suckered by CEOs.

The crucial chink in the armor:  The questionable accounting game
play while it might be contentious and is indubitably immoral, is
not necessarily illegal.

The absolute problem is that if the SEC actually pursued a suit and
(here’s the rub) if they win, that very act would open up a cataclysm
for hundreds of lawsuits against everyone from Bank of America and
Citi, which have also disclosed they used a similar strategy to adulerate
the true accounting of their accounting ledgers, and like the purposely
cooked accounts like Ernst & Young, all the way to FASB who holds the
position at the top of the corruption pyramid.  Would that be bad? This
is not to mention the hundreds of millions, perhaps billions in legal fees
that would have to be paid the out of court if a settlement fails.  That
would be bad because the only ones who win are the lawyers and the
Financial Powerhouses.  So what are “we” to do?

Drawing from the Wall Street Journal, it is important to keep in mind
Durden’s zerohedge article says, “The SEC simply cannot allow a pursuit
of justice to threaten the viability of America’s only national interest:
that of its criminal banking syndicate.”  So let’s fuck justice.  It isn’t
important in this world anyway, right?

“with everyone complicit in the crime, there is not one party that can
be singled out without every party having to be sued. Ah the benefits of
risk diversification: Wall Street realized all too well that a symbiotic
approach to middle class parasitism is the best one, as it leaves it far
less open to direct attack. Yes, any given bank may reap slightly less in
benefits immediately, but over the long run everyone makes money and
if there is some catastrophe the taxpaying peasant will have no choice
but to bail everyone out. And should there be a legal case against one,
in a reverse case of the Three Musketeers, it would have to be a case
against all. 2008 confirmed the first. Dick Fuld is confirming the
second. But don’t forget - the SEC has no money and no computers. So
it is isn’t their fault they are corrupt and siding with the criminals on
this one… and on every other one.

Expect Charles Ferguson’s question of why nobody has ever gone to jail
over the greatest financial crisis since the depression to remain
unanswered in this lifetime.  “This year’s Oscar Best Documentary
award-winner Charles Ferguson began his acceptance speech by
reminding us that three years after our worst financial meltdown, the
subject of his movie, “not a single financial executive has gone to jail.” 
He says: “Let’s take action!”
  Well, how can we?

The Lawful Path posted charts of the ownership of the Federal Reserve
Bank and cites at the bottom of their page (Isaiah 33:22) For the Lord
is our judge, the Lord is our lawgiver, the Lord is our king; he will save
us.
  Which is just another Republican ruse. 

Men are judges of men, men are lawgivers, and men imagine they are
kings, and it is only men who can save themselves.
 
Shenonymous: 1:1
 
The charts are dated 1976 (Jimmy Carter) and 1983 (Ronald Reagan). 
http://land.netonecom.net/tlp/ref/federal_reserve.shtml

and just for the hell of it, check out the speeches of FRB President
(1976-1983) Lawrence K. Roos
http://fraser.stlouisfed.org/historicaldocs/955/

And for Federal Reserve Secrets:
http://voluntarysociety.org/conditioning/federalreserve/fedres/bib.htm

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By TDoff, March 13, 2011 at 1:55 pm Link to this comment

It’s no surprise that ‘Officials at the SEC’ have determined that it may not be possible to prove that Lehman executives broke the law, since most ‘Officials at the SEC’ are either former Lehman Brothers employees or are future ‘Financial Industry’ executives.

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zonth_zonth's avatar

By zonth_zonth, March 13, 2011 at 8:42 am Link to this comment

There sits another American hero.  The dream of the underdog.  If only one works hard enough, than one can be super-rich too.  The pathology of such ostrich brains are one of which their self worth is based upon how much money, or how many material ornaments they are surrounded with.  The [innovative businessman] has been held in the highest regard by American society. These demi-gods and what they stand for should have been shattered with the collapse of the banks. 

Unfortunately the bailout will keep the American pipe dream limping forward until the empire burns out completely. 

Where is the pursuit of mental distinction amongst these ‘educated’ people? A society that heaps its regards on ignoramuses is a confused society at best.

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By samosamo, March 13, 2011 at 12:43 am Link to this comment

****************


And the citizens get to pay the cost of buying off the judge, so
another win-win situation all around. Damn what a good feeling
to live in the u.s.of assholes.

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PatrickHenry's avatar

By PatrickHenry, March 12, 2011 at 8:53 pm Link to this comment

Who at the SEC is going to prosecute anyone?

Too busy watching Porno and lobbying for that after government retirement wall street position.

Report this

By glider, March 12, 2011 at 8:21 pm Link to this comment

“enforcement officials fear they may never be able to bring civil or criminal charges against company executives”

Yeah Right!!!  This should read “fear they might be forced to bring charges against” these criminals.  Yes, I am so sure the SEC is losing sleep worrying about letting yet more elite Wall Street snakes escape.  Sadly that appears to be the SEC’s job.

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By gerard, March 12, 2011 at 7:17 pm Link to this comment

Sorry, my previous comment got posted to the wrong place.  I could just add to it, however, another screaming discrepancy of ours regarding moral choices:  We prefer not to punish rich capitalists, but instead to pick on easy marks like Pfc’s who want to “speak truth to power” and help stop the war machines.

Report this

By gerard, March 12, 2011 at 7:11 pm Link to this comment

And at the same time innocent Muslim citizens are being legally made suspect as “terrorists” and called before a Congressional Investigating Committee. At the same time Bradley Manning, who actually did the country a huge favor by making public the stupid bribery and graft behind “diplomacy” is being forced to go naked at a military brig at the same time government attorneys and other purveyors of “legality” are trying to frame Julian Assange and WikiLelaks.
  On one hand we promote innuendo and slander that promotes public misunderstanding and prejudice, and
on the other hand we punish people who risk their lives to help us clean up our national dishonesty and double-dealing with other countries.
  Moral Inconsistencies R US.

Report this

By gstoddard, March 12, 2011 at 5:59 pm Link to this comment

The labor unions and teachers have to be attacked, demonized, and demoralized
while those who contributed most to the financial collapse retain good lawyers to
save their wealth and freedom.

What a country!

Report this

By RomanKoch, March 12, 2011 at 5:34 pm Link to this comment
(Unregistered commenter)

Time to change the laws so they are less ambiguous. We the people should recruit lawyers and others who have worked for (in) the legislative counsels (councils) of state and federal governments, to start drafting bills that legislate the greatest good to the greatest number, then lobby for those bills like it’s Madison, WI.

Writing to your senators and representatives and hoping they usher your ideas through the legislative process isn’t going to do squat, unless you’ve got an obscene amount of money to burn, in which case you’ll recruit lawyers to draft bills for the greatest good to the least number, and lobby for those bills like Jack Abramoff.

Report this

By JJW, March 12, 2011 at 4:31 pm Link to this comment
(Unregistered commenter)

They need to be tried for economic terrorism.

If Iceland can do it, Obama could at least pretend to try.

Report this
PatrickHenry's avatar

By PatrickHenry, March 12, 2011 at 4:17 pm Link to this comment

Lying thieving bastards need to be tried for massive fraud, grand theft and criminal negligence.

Seize their personal assets, make an example.

Report this

By rend, March 12, 2011 at 4:10 pm Link to this comment
(Unregistered commenter)

wow,, Im shocked, the SEC cant do its job?

see Inside Job to understand why.

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