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| Tuesday, February 9, 2010 |
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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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November 14, 2008 3:35 PM ET
A county in California is seeking to recoup damages from its investments in failed investment bank Lehman Brothers and is going after the paychecks of former CEO Dick Fuld and several CFOs and directors to do it. The lawsuit, filed yesterday in San Francisco Superior Court by San Mateo County, seeks $150 million in damages from Lehman and its accountant Ernst & Young, as well as punitive damages and the recoupment of hundreds of millions of dollars in executive bonuses paid to several of Lehman’s top executives made over the last five years. The executives named include three of Lehman’s former CFOs: Christopher O’Meara, who held the position from 2004 through 2007; Erin Callan, the finance chief during the first half of 2008; and Ian Lowitt, Lehman’s CFO from June through September of this year. Lehman announced bankruptcy in September, declaring about $640 billion in assets and $613 in debts. The firm is now under investigation by federal and state authorities for alleged securities fraud. San Mateo County had $153 million of its $2.6 billion in assets in Lehman securities—including bonds and “floating rate” notes—at the time when Lehman declared bankruptcy. It may be a stretch to obtain the full amount of damages from Lehman, conceded attorney Joe Cotchett, who is representing the county, but he noted the “deep pockets” in the case may end up being Ernst & Young. The lawsuit alleges E&Y was derelict in its duty as independent auditor for not catching and disclosing the risks that Lehman was taking on its balance sheet. Lehman’s 2006 and 2007 financial reports, which E&Y signed off on, hid the firm’s exposure to risky mortgage-backed securities, especially those involving Alt-A residential mortgages, according to the complaint. The county claims E&Y raked in $31 million in audit fees from the investment bank in 2007. Lehman’s compensation structure, like many on Wall Street, was set up in a way that encouraged executives to take risks in exchange for meeting quarterly and yearly benchmarks in net income and earnings per share. A call to Barclays was not returned as of press time. In September, Barclays acquired Lehman’s business and 10,000 of its personnel.
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