The case against Lehman Brothers

Steve Kroft: Did the audit committee know?

Anton Valukas: No.

Steve Kroft: Did the board of directors know?

Anton Valukas: No.

Steve Kroft: Did Dick Fuld know?

Anton Valukas: Did Dick Fuld know? Well, he says no.

The only place Lehman's CEO, Richard Fuld, has publicly answered any questions about his firm's bankruptcy has been in front of Congress.

[Richard Fuld: I have absolutely no recollection whatsoever of hearing anything about or seeing documents related to Repo 105 transactions while I was the CEO of Lehman.]

Anton Valukas: He said the same thing to me face-to-face.

Steve Kroft: Do you believe him?

Anton Valukas: There was evidence which would show that that's not accurate. The president of Lehman Brothers told us that in fact he had conversations with Dick Fuld about this and documents were shared with him which would reflect the Repo 105 transactions and how they were being used. Richard Fuld's view on that was that he has no knowledge of it. You have other evidence that he did. A jury would have to decide who's telling the truth.

But so far there has been no jury to hear the evidence. Despite Valukas' findings -- and the supporting documents and testimony to back them up -- the Securities and Exchange Commission has not brought any charges of any kind against former Lehman executives. For the past few months, we've made numerous requests to interview the SEC's head of enforcement. All of those requests have been declined.

Steve Kroft: The Securities and Exchange Commission has not brought a case.

Anton Valukas: No, they have not.

Steve Kroft: Does that bother you?

Anton Valukas: I'm not permitted to be bothered by that. You know, my job was to set out the facts, lay it out. They have to make their own prosecutive decisions.

There is one plausible explanation why SEC hasn't has not gone after top Lehman executives. As it turns out, some of Lehman's most egregious accounting shenanigans took place right under the noses of government regulators.

Steve Kroft: How closely was the SEC monitoring Lehman Brothers during this time?

• « Previous Page
• 1
• 2
• 3
• 4
• 5
• Next Page »

[obgyn33]

Shame on you CBS. I have always been a loyal viewer and believed CBS stood out above the rest. CBS allowed Norah O'Donnell to deceive viewers by reporting on the campaign and President Obama when she is clearly biased because her husband Dan Senor, works for Romney and Ryan's campaign. Each time she talks about or scrutinize the campaign CBS should disclose to the viewers her very close relationship with the Romney Campaign. I don't expect O'Donnell to be honest, I expected CBS to be. Shame on you CBS, I am truly disappointed.

[ammo17]

how can our government be bothered with the financial collapse of our country,when all obama and eric holder want to do is protect the rights of illegal aliens.this country better wake up in a hurry,or we will be a remember when our country was great.

[mspirate]

I'd like to first commend Mr. Kroft for his bravery and skillful approach to getting at the truth behind the economic collapse of a global system that was perpetrated by a greedy and treacherous cabal. Mr. Valukas as well as Mr. Lee provided the lynch pen that exposed who and what was really behind the collapse, and what happens when you expose them--loss of career. I had the impression that the entire segment was cloaked, but what everybody knows as truth and that they dare not say: The Jews are at it again! Lehman Brothers. Of course a statement like that would only draw fire and moreover, such a cant would receive plaintiff wails of anti Semitism that would result in more than one loss of careers.

Making a killing out of someone's suffering and pain should be met with more than just a slap on the wrist, and a pocket replete with gold. What's troubling here is the vaunting, as well as the political clout that's on display by Lehman Brothers, and the fear of a society to call it what we all know: This particular group of people have entrenched themselves so deeply within our legal, financial and governmental system that there's little hope of rendering a true punishment for the executives because of who and what they are. It's a human trait to engage in a system of evil, but they have gone too far. Their corporate values clearly state that greed is good as evidenced within the 60 Minutes corpus. This implacable greed is an ethical abomination. There's no real reason to cogitate a solution, the members of the "Tribe" must be prosecuted to the fullest extent of the law, if we are to believe in a just and legal system. They must be adjudged to prison.

Someone must take-up the gauntlet and demand justice for a global system that has collapsed as a result of the Lehman Brothers fingerprints without loosing his or her job/career. Their odious turpitude must be held accountable without reprisal and the entire would should call for their heads.

[johnlockesghost]

Who said that crime doesn't pay

[millron-il]

And the blame goes to Congress and the Tea-Party of 'NO regulation.' Shame that Romney-Ryan are leading the effort to ensure that serious regulations are never enacted. Obama can't pass reform legislation, only the Congress can. Vote out the Tea-Party - and Romney/Ryan - so America can function effectively again.

[ffoulkes2009]

Sorry, but the Congress was (in both houses) at the time Democratic, and the Tea Party hadn't even been created yet. Nice try though.

[qyeteye]

ffoulkes2009 - Republicans long led efforts on deregulation spearheaded over a decade ago by Senator Phil Gram-R and advanced by House leader Dick Armey-R and the likes of junior congressman Boehner-R.

One ruse to get it passed through congress was to attach the legislation to a major omnibus bill stalled in congress (today in TEA Party times we call it hijacked). The bill was held to just before Christmas eve - I recall Mr. Gram waving the bill telling the Senate the good it was going to do for America.

Pres. Clinton-D at least later admitted he "may have followed bad advice" while Republicans continue to double-down on failure.

[millron-il]

And the blame goes to Congress and the Tea-Party of 'NO regulation.' Shame that Romney-Ryan are leading the effort to ensure that serious regulations are never enacted. Obama can't pass reform legislation, only the Congress can. Vote out the Tea-Party - and Romney/Ryan - so America can function effectively again.

[Lionhart40]

If your business is so large that if it fails it will cause a collapse of our economy then that should be a national security issue and no company should be that large. It also seems that regulators were either duped or not doing their jobs.

[ffoulkes2009]

That is what the anti-trust laws are about. Unfortunately, they aren't working quite the way they were intended to.

[joelc001]

Excellent article. As I had always suspected, I am surprised at the SEC's lack of committment on this. Actually, I am also one of the myriad of investors that have lost equity in the stock market still, this year through stock and accounting manipulations that I don't understand. I think your next article should be on BIZ Auctions and the method known as a "reverse stock split". I do not invest in the stock market anymore, and the SEC never responded to my filed complaint either.

I think you should keep after this one, especially since they all got away with it. The only victims are the millions of investors who lost all their money and the Lehman crew that did it to them. They have no conscience and I cannot figure out how they sleep at night at all. What do they see when they look in thier mirrors?


Joel Cunningham
Bulverde, TX

[ffoulkes2009]

My suggestion to you, Joel is to learn more about the stock market before investing. That might save you a lot of woes.