Accounting Firm To Defend Law Suit

(NEW YORK, NY) – We intend to vigorously defend against the civil claims alleged by the New York Attorney General. There is no factual or legal basis for a claim to be brought against an auditor in this context where the accounting for the underlying transaction is in accordance with the Generally Accepted Accounting Principles (GAAP).  Lehman’s audited financial statements clearly portrayed Lehman as a highly leveraged entity operating in a risky and volatile industry.  

Lehman’s bankruptcy occurred in the midst of a global financial crisis triggered by dramatic increases in mortgage defaults, associated losses in mortgage and real estate portfolios, and a severe tightening of liquidity. Lehman’s bankruptcy was preceded and followed by other bankruptcies, distressed mergers, restructurings, and government bailouts of all of the other major investment banks, as well as other major financial institutions. In short, Lehman’s bankruptcy was not caused by any accounting issues.

What we have here is a significant expansion of the Martin Act. Although the Martin Act is almost 90 years old, we believe this is the first time that an Attorney General is attempting to use this law to assert claims against an accounting firm, rather than the company that took the alleged actions.

We look forward to presenting the facts in a court of law.

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About the Author

Ian Shalapata
Ian Shalapata is the owner and publisher of Square Media Group. He covers politics, the police beat, community events, the arts, sports, and everything in between. His imagery and freelance contributions have appeared in select publications and for organizations in Canada and the United States. Contact Ian with story ideas.
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