Lehman Bankrutpcy: "Repo 105, Bank's Accounting Gimick, Was Like A Drug," (they cooked the books)

Lehman Bankrutpcy: 'Repo 105,' Bank's 'Accounting Gimick,' Was Like 'A Drug,' Emails Show

http://www.huffingtonpost.com/2010/03/12/lehman-bankrutpcy-repo-10_n_496463.html



Former Lehman CEO Dick Fuld

The arcane "accounting gimmick" employed by Lehman Brothers as the firm failed in 2007 and 2008, was like "a drug" propelling the bank to conceal the true nature of its financial health, according to bankruptcy documents released yesterday.

As news organizations pour through the 2,200 pages of documents released by Anton Valukas, the examiner in charge of sifting through the most expensive bankruptcy in history, new details have surfaced about possible criminal actions by Lehman executives.

An executive referred to by Lehman execs as the firm's "balance sheet" czar -- who later went on to become the firm's COO -- likely had knowledge of the firm's highly creative accounting maneuvers, notes The New York Times. Here's the NYT:



At the center of the controversy is a technique called "Repo 105," under which Lehman was able to move $50 billion off of its balance sheet in the second quarter of 2008 alone, MarketWatch reports. Here's more from Market Watch: