Calif County Accuses Lehman Executives, Auditor Of Fraud In Suit
The suit, filed in San Francisco Superior Court, said executives of the former Wall Street investment bank made repeated public statements about its financial strength while privately scrambling to save it from collapse.
The suit names former Lehman Chief Executive Richard S. Fuld Jr., former Chief Financial Officers Christopher M. O'Meara and Erin Callan, former President Joseph M. Gregory, certain directors and Ernst & Young, Lehman's auditor.
It accused Lehman of hiding its exposure to mortgage-related losses while reporting record profits for fiscal year 2007 and giving bonuses to its executives.
"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. "In our view, their actions were blatantly illegal."
The San Mateo County Investment Pool consists of the county, school districts, special districts and other public agencies in the county.
San Mateo County Supervisors Richard Gordon and Rose Jacobs Gibson called for a federal investigation of the allegations in the suit, and Supervisor Jerry Hill, newly elected to the state Assembly, will request hearings on how many California public entities face similar losses.
Representatives of Lehman and of Ernst & Young were not immediately available to comment.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com
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(END) Dow Jones Newswires
November 13, 2008 17:43 ET (22:43 GMT)
Publié le 13 novembre 2008 Copyright © 2008 Dowjones
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