Summary
12 March 2010
A court-appointed investigator says the American investment bank, Lehman Brothers, used "accounting gimmicks", and had been insolvent for weeks before it filed for bankruptcy in September 2008.
Reporter:
Nick Cosgrove
Lehman Brothers building in New York
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Report
The collapse of Lehman Brothers was the biggest bankruptcy in US history and sparked the worst financial crisis since the Great Depression. This report, which runs to two thousand, two hundred pages, has found that the leadership of Lehmans, including the Chief Executive, Dick Fuld, deliberately used financial trickery going back to 2001, to make the bank appear healthier than it really was.
In 2008 alone this mechanism enabled Lehmans to remove 50 billion dollars from its balance sheet, allowing it to maintain a decent credit rating and investor confidence.
The report says that Lehman was unable to get an American law firm to sign off these transactions, and instead moved the work to its London office, with the blessing of a leading city law firm. The bank's auditors also come in for criticism. Ernst and Young is accused of failing to question and challenge improper or inadequate disclosures in the bank's results.
Nick Cosgrove, 大象传媒 News
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Vocabulary
- bankruptcy
state of being unable to pay what you owe
- the Great Depression
a period of time, which began in 1929, when most of the world economies were in decline
- deliberately used financial trickery
knowingly or purposefully changed the financial figures in a dishonest way
- this mechanism enabled
this way of working allowed
- to maintain a decent credit rating
to continue to appear to be a good and reliable bank
- to sign off these transactions
to agree to these dealings
- with the blessing of
with the approval of
- auditors
people whose job it is to carry out an official examination of the accounts of a business and to write a report on it
- improper or inadequate disclosures
not giving enough information openly and honestly
