SEC Officials: Lehman Brothers Criminal Case Has Stalled

(Reuters) - A government probe into the fall of Lehman Brothers Holdings Inc has hit so many snags that enforcement officials fear they may never be able to bring civil or criminal charges against company executives, the Wall Street Journal reported on Saturday.

According to the paper, Securities and Exchange Commission officials have begun to doubt they can prove that Lehman broke U.S. laws by moving nearly $50 billion in assets off its balance sheet to make it appear that the securities firm had lowered its debt burden.

Quoting people familiar with the situation, the Journal said SEC officials are also worried they might not win any lawsuit against former Lehman Chief Executive Richard Fuld Jr accusing him of improperly accounting for the value of a large real estate portfolio acquired with the takeover of Archstone-Smith Trust, or to hide losses to investors related to that deal.

If the SEC decides not to file charges against Lehman, the securities firm could escape criminal prosecution because the Justice Department often takes its lead from the SEC, the newspaper said.

(Reporting by Julie Steenhuysen; Editing by Vicki Allen)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[BigDaddyWow]

02:57 PM on 03/14/2011

A thorough investigation will again, lead to the names of many Wallstreet bankers who have already escaped the gallows. Despite the terrible terrible management of LB from it's last CEO, Dick Fuld they should have never been allowed to fail. Why they were not bailed out and everyone else was is the real issue as it was THE scenario that favored banks the best while hurting America the worst. Absolutely criminal.

[deltalady]

11:28 AM on 03/14/2011

The WH is FULL of these crooks, so what do you expect? Whenever I read the headlines I just shake my head. There is absolutely NO effort on behalf on this Justice Dept and this president to set things right. They'll give a little lip service, but it's all for nothing. Face it. The US treasury was stolen and the economy broken by the likes of Lloyd Blankfiend and his kind and there's not a d*mn thing we can do about it. They took our money like a pickpocket on the street with the full approval on both the Bush WH AND the Obama WH. There's no way I'm going to be able to pay my taxes on April 15th. Let's see what kind of deal I can get with the IRS. Bet it won't be as good as this one. And WHY can't the president tell the SEC what's appropriate. We always call him the most powerful man in the world, yet he can't step up to the plate on this one? Right.

[jo smith456]

09:57 AM on 03/14/2011

SURPRISE, SURPRISE...Only peons suffer,...
What a systemic corruption between wall-street and govt.;...when lobbyists control our government through election and high-position appointments.
1) DOWN with legalized "election financial contribution", a.k.a. vote-buying; this is the blood-system of lobbying that influences election and high-position appointments in govt.
2) MSM is part of the problem. (MSM has even lost its credibility in many parts of the world, e.g. Middle East.) CREATE a non-partisan, govt funded, independent (like Office of Mgt and Budget) "media" whose editorial board members come from different parts of our society.
3) Remove the archaic College Electoral System.
4) Term limits for members of US Congress; if the President has term-limit, why not congressional members

[matthewhgrant]

07:43 AM on 03/14/2011

the real problem with all this is that all of them know what the others did and if you take fuld down he's likely to pinpoint geitner and all the rest. imagine the house of cards that would collapse, not to mention the embarrassment to obama, bush, clinton, and so on. it won't happen until the american public DEMANDS it, and we aren't there, yet. it's coming, just not yet.

[chappelforpres]

10:52 PM on 03/13/2011

Years of staggering Republican deficits plus a costly immoral war are suddenly trumped by an economic tsunami, the overnight collapse of a massive real estate bubble. The unhappy fallout of another bout of speculativ­­­e malfeasanc­­­e by the arrogant, inhuman, and largely unregulate­­­d investment banking cartel. An industry that has become a pariah.

Two unrelentin­­g years of suffering has extinguish­­­ed any trace of high level accountabi­­­lity, as these habitual criminals, their enablers and political sycophants­, rant against the poor, the disenfranc­­­hised, unions, HUD, - blaming everyone and anyone else, for our woes. We will look back at this bailout as a perfect opportunit­y to extract a measure of justice squandered­.”

[duckfan00]

07:16 AM on 03/14/2011

And yet the former managers/executives moved on to Barclays,Citibank,and hedge funds to feed their bonus addiction.....

[matthewhgrant]

07:45 AM on 03/14/2011

and they will continue grabbing what they can as they know it won't last forever. once caught, they get to go away with their spoils. win win. not for "us", but for them.

[vippy]

03:49 PM on 03/13/2011

Watch the documentary  "inside job"  which should be available at Blockbuster now and then never ever vote for these crooks in Washington ever again.  Just mind boggling what they pulled on us and now want to strip us of everything while taxing us to death.  Time to stand up for ourselves.

[matthewhgrant]

07:46 AM on 03/14/2011

INSIDE JOB ought to be aired by the networks so that americans at large can see what happened on wall street. the unfortunate reality about this issue is that most haven't the attention span nor the interest to stay connected for more than 5 minutes, a fact wall street is counting on.

[vippy]

12:51 PM on 03/14/2011

Most care about their 6-packs and their peace and they just don't want to be bothered.  If it aired they could not comprehend what is on, it is like talking to a brick wall.  I know I tried every election.  They only know the ramification once they get hit in the pocket. 

[Osusuki]

01:31 PM on 03/13/2011

Y'know, if I were Ivan Boesky, I would sue the SEC for unequal treatment. Boesky was sentenced to 3.5 years, a $100 million fine, and barred from trading for life. These Lehman clowns never even missed a bonus, much less sweated going to jail.

[OldTulsan]

01:52 PM on 03/13/2011

Ditto Michael Milken, Charles Keating, and the others sent to prison during the S&L crisis.,

[NOSOCIALNETS]

08:56 PM on 03/13/2011

And no one went to jail.......FARCE

[matthewhgrant]

07:47 AM on 03/14/2011

where is ivan? and charles keating? we know where mc cain is.

[namewithheld]

12:26 PM on 03/13/2011

Well, at least we got Lindsay Lohan.

[NOSOCIALNETS]

08:57 PM on 03/13/2011

Right steal 1000 go to jail. Steal 1000000000 go to France for the next big party.

[OldTulsan]

12:12 PM on 03/13/2011

William K. Black at the Lehman Brothers collapse hearings, when he asked why the SEC only had 24 investigators:

http://fdlaction.firedoglake.com/2010/04/20/transcript-video-bill-black-testimony-on-lehman-bankruptcy/
Transcript & Video: Bill Black Testimony on Lehman Bankruptcy | FDL Action

"...The SEC: we’re told they’re only 24 people in their comprehensive program. Who decided how many people there would be in their comprehensive program? Who decided the staffing? The SEC did. To say that we only had 24 people is not to create an excuse — it’s to give an admission of criminal negligence. Except it’s not criminal, because you’re a federal employee.

In the context of the FDIC, Secretary Geithner testified today that this pushed the financial system to the brink of collapse But Chairman Bernanke testified we sent two people to be on site at Lehman. We sent fifty credit people to the largest savings and loan in America. It had 30 billion in assets. We had a whole lot less staff than the Fed does.

We forced out the CEO. We replaced the CEO. .."

[OldTulsan]

12:45 PM on 03/13/2011

Professor Black's testimony starts at 14:20 and ends at 22:14 of this video of the Lehman Brothers Failure congressional hearing:

http://www.c-spanvideo.org/program/293077-4
2008 Lehman Brothers Failure, Panel 4 - C-SPAN Video Library

[BobHiggins]

10:04 AM on 03/13/2011

On Wall Street and in the executive suite, crime pays and pays well.

[AZreb]

09:43 AM on 03/13/2011

This article on top of the one regarding the "claims" of wrongdoing by the ex-head of Fannie Mae. Is the SEC completely or just partially inept? Can it or can it not make a case against these financial crooks? What are the members of the SEC doing to justify their employment?

Too Big to Fail - Too Rich to Go to Jail.

[bynddrvn5]

09:41 AM on 03/13/2011

Wait, what?!

Why is this investigation stalled and why don't we hear about these problems with other types of crimes? Imagine the public outcry if they start letting dangerous criminal gangs go free, because the case is stalled.

I hope this isn't due to a lack of funds, or it will be the only thing I can think about the next time I see a high speed chase in Los Angeles, with 12 helicopters and 40 patrol cars following around an econobox car for hours and hours.

[IllTakeTheRedEye]

08:35 AM on 03/13/2011

What is it going to take?
 
Are Americans going to have to start social upheaval to get D.C. and the SEC to do their job?

[big tom]

08:55 AM on 03/13/2011

it will take citizens with 30 foot ropes a few large trees... the others will get the message..public hanging...posted on cnn. a picture is worth a thousand words...and lawsuites

[OldTulsan]

01:55 PM on 03/13/2011

Unless the financial criminals are prosecuted and punished, they will do it again. They must be have fear of loss of both money and freedom.

Abandonmen­t of the Rule of Law can be used as an excuse for anything from vigilante justice to a military coup d'etat, both bad things.

[mariusvinchi]

08:24 AM on 03/13/2011

I wonder how many of the SEC "investigators" have ties to Lehman executives....Rhetorical question....