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Ernst & Young Is Really Wishing They Hadn’t Blown Off That Lehman Brothers Whistleblower

FT Alphaville found this notable quote from District Judge Lewis Kaplan’s opinion (whole thing after the jump):

The TAC alleges that Lee told E&Y in June 2008 “that Lehman moved $50 billion of inventory off its balance sheet at quarter-end through Repo 105 transactions and that these assets returned to the balance sheet about a week later.” Assuming that is so, E&Y arguably was on 308 notice by June 2008 that Lehman had used Repo 105s to portray its net leverage more favorably than its financial position warranted, a circumstance that could well have resulted in the published balance sheet for that quarter being inconsistent with GAAP’s overall requirement of fair presentation. Accordingly, the TAC adequately alleges that E&Y misrepresented in the 2Q08 that it was “not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles” notwithstanding Lee’s disclosure to it.


“Lee” you may remember is Matthew Lee Lee, the Senior VP for Global Balance Sheet and Legal Entity Accounting who also said this about E&Y’s reaction to his warning on Repo 105:

They certainly didn’t support it. On the Repo 105 issue, they knew about it; they did not appear to know that the number was so large.

Ouch.

lehmanruling

3 thoughts on “How Much Is An EY Shirt Selling For At TJ Maxx These Days?”

  1. EY those guys are weak. Chipman69 would wipe up the floor at TJ Maxx with them, after he stole their women. H

  3. Do a story on how they only care about staff who are not Office Services and anyone else who are required to be in the office full time. Everyone else are shown concern for Covid & Omicron. Obviously every other employees lives are more important and told by leadership they have the choice to work from home or in the office. The message is clearly promoting flexibility for anyone not in the groups listed above. I’m lucky to not be apart of this group. However, I still don’t think those people should be treated any less. But the Covid-19 Updates sent to everyone in the firm clearly say’s they don’t care and they are less worthy. To say anything different than I’m sorry and we were wrong is plain wrong and violates the firm’s own code of conduct supposedly for all employee’s and Partners. However, most know this is not true. The managers of these groups don’t even follow the same guidance forced upon these people in the office.

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