Professor Elam

Thursday April 15 2015

Ernst settles the Lehman case for $ 10 Million.  Like Enron,Lehman cooked up a scheme to move liabilities off their balance sheet.This was known  as Repo 105. Ernst was the auditor when Lehman evaporated. Ernst previously agreed to pay $99 million to settle various civil suits. 

Ernst did not admit nor deny wrong doing. Ernst claims accounting issues did not cause the firm total.That is probably true but hardly accurate. 

Ernst gave Lehman a clean bill of health knowing about Repo 105. In its last and same year,CEO Richard Fuld paid himself $ 300 million, and never was a charged with anything.

I don't understand now Fuld is out on holidays while Skilling and Fastow went to jail,do you?

More on Lehman here.