Lehman Shareholders Sue Ernst & Young

　　A class-action lawsuit by former shareholders of Lehman Brothers has been amended to add the defunct investment bank’s auditing firm, Ernst & Young, as a defendant.

　　The amended complaint from a group of investors also describes the repurchase transactions detailed in the report of bankruptcy examiner Anton Valukas. The Lehman shareholder suit was originally filed following wipe-out losses stemming from the firm’s Sept. 15, 2008, bankruptcy filing, the largest in U.S. history. Investors allege that in the period leading to the bankruptcy, former Lehman officers, including ex-CEO Richard Fuld, made repeated misstatements about the firm’s financial health, including minimizing Lehman’s exposure to weakening residential and commercial real estate markets.

　　In the newly filed complaint, plaintiffs claim that Lehman used certain repurchase and resale transactions, known as “Repo 105” and “Repo 108” transactions, to temporarily remove tens of billions of dollars’ worth of assets from its balance sheet at the end of financial reporting periods, and that Lehman executed the repo agreements solely to fraudulently prop up its disclosure statements.

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　　The complaint takes note of Valukas’ testimony to the House Committee on Financial Services in April: “[T]he public did not know there were holes in the reported liquidity pool, nor did it know that Lehman’s risk controls were being ignored, or that reported leverage numbers were artificially deflated. Billions of Lehman shares traded on misinformation.”

　　The amended complaint further notes Valukas’s statement that Ernst & Young “knew or should have known” that parts of Lehman’s financial statements were false and misleading. “Ernst & Young had a professional obligation to communicate the issue to both senior management and the Audit Committee and to recommend corrections of the Forms 10-Q, and also to either issue modified review reports noting the materially inadequate disclosures, or to withhold its review reports altogether,” said Valukas.

　　The complaint notes that the Big Four auditor was made aware of Lehman’s improper use of Repo 105 transactions during its investigation of claims made by a whistleblower.

　　Ernst & Young disputes the claims in the amended lawsuit.

　　“We are confident in our ability to successfully defend ourselves against claims arising from our work with Lehman Brothers,” said a statement forwarded by Ernst & Young spokesman Charles Perkins. “Throughout our period as the auditor of Lehman, we firmly believe our work met all applicable professional standards, applying the rules that existed at the time. Lehman’s bankruptcy was the result of a series of unprecedented adverse events in the financial markets. As the Bankruptcy Examiner has acknowledged, Lehman's bankruptcy was caused by a collapse in its liquidity, which in turn was caused by declining asset values and loss of market confidence in Lehman. It was not caused by any accounting issues.”

　　The Lehman action was brought in the Southern District of New York before Judge Lewis Kaplan. In addition to Fuld, defendants include Lehman’s former CFO, members of its board of directors and various institutions that underwrote Lehman debt and equity offerings.

　　The securities law firm Barroway Topaz, Bernstein Litowitz and other firms jointly represent the lead plaintiffs: five pension funds based in the U.S., Europe and Guam that owned more than 140 million shares of Lehman equity. Nearly a dozen individual and institutional investors joined the co-lead plaintiffs in the suit.

雷曼股东起诉安永

　　雷曼兄弟原股东已经将这家倒闭投行的审计公司——安永追加为被告人。

　　股东们声称，在申请破产之前，包括前首席执行官RichardFuld在内的雷曼高管多次误报公司的财务状况，包括减少了雷曼对日益衰退的住宅和商业地产市场的风险敞口。

　　修改后的指控进一步指出了破产检察官Valukas的声明：安永“知道或者应当知道”雷曼的部分财务报表存在虚假和误导性。“安永应具有专业义务就报表存在的问题和高级管理层以及审计委员会进行沟通并建议在表格10-Q进行更正，或发表保留审核报告指出其报表存在重大不当披露，或拒绝发表审核报告意见，”Valukas说。

　　“我们有信心为诉讼进行辩护”安永发言人CharlesPerkins说。“在作为雷曼审计师期间，我们坚信我们的工作符合当时存在的所有适用的专业准则。雷曼兄弟的破产是由于金融市场上一连串前所未有的不利事件所引发。破产检察官也已经承认，雷曼兄弟的破产是由于其丧失了流动性，而这又是由于资产价格不断下跌和市场丧失了信心所造成的。它不是由任何会计问题所引起的。”

　　雷曼诉讼被送达至纽约南部地区法官LewisKaplan.除了Fuld，被告还包括雷曼前首席财务官、董事会成员、各类承销雷曼债券和股票发行的机构。

　　证券律师事务所BarrowayTopaz，BernsteinLitowitz和其他公司联合代表原告：在美国、欧洲和关岛5个养老金基金，它们共持有超过1.4亿股的雷曼股票。十余位个人和机构投资者也加入了这场集体诉讼。