| Lehman Executives Get Under Penalty |
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| Sunday, 19 October 2008 | |
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Richard Fuld of “The New York Times” reported on Saturday that prosecutors have stepped up with deeper investigations in to the downfall of Lehman Brothers and Bankruptcy filing. The Times stated that “federal prosecutors in Brooklyn, Manhattan and New Jersey were examining events leading to Lehman's collapse and bankruptcy filing.”Fuld has gained criticism as Lehman filed for bankruptcy on September 15, 2008, due to the indication at a congressional hearing in advance this month in which he stated that he did not mislead investors and others about the firm's financial health. One person stated New Jersey attorneys were investigating into whether Lehman executives inclusive of Fuld misguided investors that were indulged in the $6 billion infusion of capital declared by Lehman in June relating to the bank's condition. The infusion happened as Lehman declared a $2.8 billion loss in the third-quarter, which reasoned its shares to plunge. The New Jersey Division of Investment, that did invest into the capital raising has been subpoenaed and the division's director did not return a call from the Times seeking comment on the issue. The attorneys of Brooklyn and Manhattan are investigating in to comments given by the executives of the Lehman brothers at a conference call that was organized in the quarter of September that was just 5 days before the company filed for Bankruptcy, per The Times. The attorneys of Brooklyn and Manhattan are also looking in to whether the Lehman allocated accurate values on its large commercial real estate holdings are legit. It is still unclear as to if any of the offices will offer their cases; however, The Times did not provide with any decisions that has been arrived at since legal experts required attorneys to investigate and bring in fraud cases filing against the Lehman executives. This can be achieved by probing deep in to the internal documents that are in disagreement about the public statements given by the bank. The spokesman for the Fuld stated “representatives of the prosecutors' offices declined to comment” that the information he has offered is just a summary of the authentic information he has learned at that time. Joseph Gregory, the former president and Erin Callan, the former chief financial officer of the Times stated “citing a person with knowledge of the matter.” One area of focus for New Jersey prosecutors is whether or not Fuld or other Lehman executives had made any misleading statements about the bank's condition to investors who took part in a USD 6-billion infusion of capital announced by Lehman on June 9, the newspaper said quoting a person close to the matter. |
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