Charlie Gasparino: “As of right now” Erin Callan Won’t Be Charged By the SEC

Posted on by Caleb Newquist

But next Monday, Wednesday or post-Labor Day, it could be a completely different story!


We’re waiting on the video from our friends over at FBN but for now here’s what the Fox Business News Breaking specialist has for us:

On who from Lehman Brothers will be charged by the SEC:
“There is a lot of speculation as to who will be charged in the SEC’s investigation of Lehman Brothers. As of right now at least, it will not be the former CFO Erin Callan.”

On how we know Callan is not being charged:
“Attorney for Callan Robert Cleary tells FBN she has not received a Wells Notice. As of right now she is not going to get charged. It could still come.”

On when the charges will be filed:
“This is an interesting development because the end game on this is clearly happening. And it’s the two year anniversary of Lehman’s bankruptcy Callan was one of the people putting out the positive image of the firm as it was imploding that’s what they are investigating.”

So there you have it! Things are day-to-day for Ms Callan (i.e. kicking it in the Hamptons, dating a fire fighter). The situation remains fluid.

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Berkshire CFO Attempts to Kill SEC Curiosity

When you’re a folksy billionaire octogenarian, you can afford to have others do your dirty work. In the case of the Warren Buffet, he has Charlie Munger hate on accountants for anything and everything under the sun.

Similarly, when the SEC comes calling, the Sage of Omaha can ring up Berkshire CFO Marc Hamburg. On the one hand, you might expect WB to shoot the breeze with the SEC employees since they likely share a fondness for a certain film genre.


However, when the conversation turns to business, the old man probably claims that he has an interview on tax cuts, a bridge match with WHGIII or a lunch date with Z-Knowles. This allows him to turn the SEC scamps over to Hamburg who plays a little bit of a bad cop to the Buffet’s chatty, dirty Grandpa. The CFO then lets the SEC know, in no uncertain terms, that they’re barking up the wrong tree:

In an April letter, the SEC asked Berkshire why it was not recording write-downs on shares with $1.86 billion in unrealized losses, all of which had been in that position for at least a year.

Given the duration of those losses, the SEC said they appeared to be more than temporary and as such should have been written down.

In a detailed response, Berkshire Chief Financial Officer Marc Hamburg said most of the losses with more than 12 months’ duration as of December 31 were concentrated in Kraft and U.S. Bancorp, shares it had acquired in 2006 and 2007.

Hamburg said that as of December 31, Berkshire determined both companies had enough earnings potential that their share prices would eventually exceed the original cost of the stock. It also has the “ability and intent” to hold the shares until they recovered, he said.

“We believe it is reasonably possible that the market prices of Kraft Foods and U.S. Bancorp will recover to our cost within the next one to two years assuming that there are no material adverse events affecting these companies or the industries in which they operate,” Hamburg said.

And if this doesn’t work, they’ll just schedule Munger for another speech.

SEC questioned Warren Buffett’s Berkshire on loss accounting [Reuters]