John Lounsbury submits:
Breaking news at ft.com reports that Merrill Lynch, now a subsidiary of Bank of America (BAC), formally protested to the SEC and the Fed that something was wrong with Lehman Brothers’ (LEHMQ.PK) accounting practices as early as March, 2008. See this article by Henny Sender.
This new information adds to the mounting evidence of fraud at Lehman and complicity, either passive or active, by the SEC and the Fed. Last week, I wrote about the report by court appointed examiner, Anton Valukas, who discovered that Lehman executives had (or should have had) knowledge of improper accounting practices that created the illusion of the firm having much greater capital reserves than actually existed. The Valukas report also faulted Ernst & Young (Lehman’s accountant) and SEC and Fed representatives who had full access to Lehman’s books in 2008.