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’Does Moody’s fancy itself an auditor?
Repo 105 and the role played by Ernst & Young has once more focussed attention on the small world of international accountancy.
Inevitably, the allegations against the firm — as detailed by the FT – invoked ‘dark memories of Enron’ and other instances of creative accounting.
Repo 105: the fun starts all over again
Securities and Exchange Commission head Mary Schapiro is on the case of Lehman-esque Repo 105-style shenanigans – where ever they may be.
As Reuters reported on Monday:
RTRS-SEC’S SCHAPIRO SAYS AGENCY
Einhorn v Lehman, congressional hearings edition
Chazzer Gasparino seems to be settling into his new role at Fox Business News quite nicely, with what appears to be a slightly speculative scoop about David Einhorn and Lehman Brothers.
As Gasparino reported on the Fox Business website (emphasis ours):
Repo ichi zero go?
Repo 105 — the accounting device used by Lehman Brothers’ to disguise its true leverage ratio in the final years of the bank’s existence — would have been nothing without a willing counterparty.
The accounting gimmick,
The Citigroup chairman doth protest too much
Or is this damning Vikram Pandit with faint praise? Via Reuters on Monday:
RTRS-CITIGROUP INC <C.N> CHAIRMAN PARSONS SAYS PANDIT ‘HAS DONE A TREMENDOUS JOB’ AS CITI CEO – BLOOMBERG TV
CITIGROUP CHAIRMAN PARSONS SAYS PANDIT HAS SUPPORT OF THE BOARD – BLOOMBERG TV
And finally,
‘$50bn is a drop in the ocean’
Quick! Someone tell Steve Jobs that former Lehman executives appear to have made off with his infamous reality distortion field, if their recent statements are anything to go by.
Consider the following assorted media reports (emphasis/links ours throughout).
Lehman alone in its Fed-Freedom CLO bid?
One more little piece of the Lehman puzzle.
Deus Ex Macchiato points us in the direction of Volume IV of the court-appointed Examiner’s report into the Lehman Brothers’ bankruptcy. Specifically, the bank’s use of the Federal Reserve’s Primary Dealer Credit Facility,
Dick Fuld? Not a bad guy (and other contrarian takes on LEH)
While it was inevitable, FT Alphaville is nonetheless impressed at the speed with which the contrarian camp has come out in defence of Lehman Brothers, post Valukas.
First up, Chazzer “Crazy Like a Fox Business Anchor”
Igor, Igor! It’s alive, it’s alive… it’s ALIVE!
…and Dicktor Fuldenstein’s monster will walk the earth once more. Or will it? We simply couldn’t resist giving you more details of the restructuring plan for Lehman Brothers — filed in New York late on Monday,
Cap * 105
What is it with Lehman Brothers and 105-titled operations?
Buried in Volume II of the 2,200-page Court Examiner’s report is the story of Cap * 105 — a commercial property valuation system used by Lehman’s Principal Transactions Group (PTG) and its real estate servicer,
A future ‘Big Three’?
Here’s where we currently stand in the overly consolidated world of international accountancy.
Firms ranked by revenues:
Price Waterhouse Coopers Lybrand Ross Montgomery
Deloitte Touche Tohmatsu
The genesis of Repo 105
Continued from ‘Repo 105,’ in which FT Alphaville began dissecting the official 2,200-page Examiner’s report into the Lehman Brothers bankruptcy.
In 2001 Lehman Brothers held a meeting with its lawyers and auditors.
What’s in Repo 105
While Repo 105 was created in 2001, it proved very useful for Lehman Brothers in terms of publicly reducing leverage as the financial crisis intensified in 2007 and 2008.
Lehman had lots of assets — CMBS,
Repo 105
Think window-dressing on a massive, and possibly misleading, scale.
Much of the 2,200-page Examiner’s report into the Lehman Brothers bankruptcy centres around an “accounting gimmick” used by the bank,
Europe’s ABS currency-swap exposure
Back in January, a US court rather controversially decided that claims of a Lehman Brothers special purpose vehicle — to which the bank was a counterparty — should not be subordinated to other creditors.
‘More bad news’ on bank CDO exposures to come, BofAML says
FT Alphaville wrote in October 2008 that, by and large, banks’ holdings of synthetic corporate CDOs had yet to be written down. Fast forward to December 2009, and it looks like the same might still be true for the majority of those holdings.
KPMG faces Thai probe on Lehman
Thai police have summoned three executives at KPMG, liquidators of the Hong Kong subsidiaries of Lehman Brothers, to Bangkok for questioning over the sale of properties previously owned by the failed bank.
Hedge funds could recoup $11bn from Lehman
Lehman Brothers International (Europe), where more than $35bn of hedge fund assets have been frozen since the bank’s collapse last September, could return about $11bn to fund managers by March if enough firms approve a new plan,
Repo-ssessed: Lehman RMBS goes on sale
A European central bank is reportedly looking to take advantage of the recent bond market rally to offload something pretty special: Lehman-originated RMBS.
From Bloomberg:
The central bank of Europe’s largest economy [Germany's Bundesbank] hired Morgan Stanley and structured finance advisory firm AgFe Ltd.
Lehman Zombie trade losers
For those wondering what happened to the adventurous idiotic folk who dabbled in pink sheet-traded Lehman shares in the run up to the anniversary:
Related link:
[The Lehman Anniversary] Day of the dead – It lives! – FT Alphaville
Court asked to back Lehman scheme
PwC, the administrators of Lehman Brothers in Europe, on Monday asked the UK’s Court of Appeal to approve a plan it says will help speed the winding-up of the collapsed bank. The consultancy firm is attempting to overturn an August court ruling that blocked the plan,
Record fees for Lehman wind-up
The winding-up of Lehman Brothers’ European operations is heading into record territory for accountancy and legal fees in the region, as well as for the size of claims made against the overseas parent company.
Lehman Brothers bankers claim £70m in lost pay
Six European bankers at Lehman Brothers are claiming £70m for lost pay and bonuses from the administrators of the collapsed bank, the Telegraph reported, citing court documents. Italian banker Riccardo Banchetti,
Fed probed on Lehman repayment
A court-appointed examiner investigating Lehman Brothers’ bankruptcy is exploring whether the Federal Reserve improperly cut in front of other creditors owed money in the $613bn bankruptcy case, court records show,
What would a Goldman-Wachovia tie-up have looked like?
Vanity Fair is fast establishing itself a must-read for anyone interested in the back-room dealings of Wall Street and US regulators, and the upcoming November issue is no exception.
Consider the following press release,
The great Lehman derivatives muddle
Every now and then, a bit of news comes around that threatens to turn the world as we know it on its head. The purported decision by a US bankruptcy court to overrule one of the fundamental tenets of the derivatives market – the ISDA Master Agreement – may turn out to be something of a game-changer.