Ernst & Young Hit With Civil Fraud Suit
Andrew Cuomo cites 'massive accounting fraud' in Lehman Bros. dealings
By Matt Cantor,  Newser User
Posted Dec 21, 2010 11:01 AM CST
In this Nov. 2, 2010 file photo, New York Gov.-elect Andrew Cuomo gives his victory speech in New York.   (AP Photo/Mary Altaffer, File)

(Newser) – Andrew Cuomo filed a civil fraud lawsuit against Ernst & Young today, following reports that the company allegedly helped Lehman Brothers mislead investors. According to the complaint, the accounting firm approved Lehman’s use of “Repo 105” transactions, a type of debt that was labeled as sales to reduce the appearance of risk to investors, and stood idly by while Lehman misled investors and analysts on conference calls, reports the Wall Street Journal.

“Ernst & Young substantially assisted Lehman Brothers Holdings Inc., now bankrupt, to engage in a massive accounting fraud," said the New York attorney general. He said the accounting firm was paid more than $150 million in fees from Lehman between 2001 and 2008.

 

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