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defendandprotect Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 03:09 PM
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SEC: Accounting move masked Lehman's perilous condition
SEC is looking into accounting at 19 biggest banks
By ALAN ZIBEL, AP Business Writer Alan Zibel, Ap Business Writer 10 mins ago
WASHINGTON The Securities and Exchange Commission is examining whether any of the 19 largest U.S. banks are using an accounting trick that a bankruptcy examiner has said led to the collapse of Lehman Brothers, SEC Chairman Mary Schapiro said Tuesday.

Schapiro testified at a congressional hearing that the SEC is scrutinizing Lehman's use of the accounting move, known as Repo 105, that allowed it to mask its weakness before it failed.

She said the agency has sent letters to the 19 banks, seeking information about any such transactions.

The hearing is looking into what led to Lehman's meltdown in September 2008. But it also drew lawmakers into a partisan squabble over the Obama administration's push for financial regulatory reform.

Lehman's collapse was the biggest corporate bankruptcy in U.S. history and threw global financial markets into crisis. The hearing probed the bankruptcy examiner's report that said the firm masked $50 billion in debt.

Schapiro said the SEC is examining "the truthfulness of the disclosure" in Lehman's financial filings.

"It's not clear any action by the SEC could have saved Lehman Brothers, but we are determined to use the lessons of that experience to be more effective," Schapiro said. "More vigorous oversight and a
new approach are essential."

http://news.yahoo.com/s/ap/us_sec_meltdown_wall_street
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Bozita Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 03:15 PM
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1. Repo 105 should be renamed Now-You-See-It, Now-You-Don't
Pure magic!
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Turbineguy Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 04:11 PM
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2. If they had as much equity, liquidity and low risk
as Fuld says, how come they went bankrupt?

"Hey! You fucked up! You trusted us!"

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