Disgraced Lehman CEO Fired

Financial giants refuse to die, Steven Davidoff explains

(NEWSER) - You might remember Lehman Brothers from its starring role in kicking off 2008's financial crisis by declaring bankruptcy, and hence, you might think it is dead and buried. But you'd be wrong, writes Steven Davidoff in the New York Times : Lehman is actually still shambling around, zombie-like, and what's more, it's trying to get bigger. Courts are still trying to work through Lehman's bankruptcy, the biggest in history, and in the meantime Lehman's estate is trying to buy apartment firm Archstone-Smith. More»

US accuses them of dodging due diligence as crisis fallout spreads

(NEWSER) - The Federal Housing Finance Agency—the agency behind Fannie Mae and Freddy Mac—has filed suit against more than a dozen big banks for their role in the mortgage meltdown mess. The feds, seeking billions in compensation, accuse the banks of misrepresenting the quality of mortgage securities, reports the New York Times . The suit accuses institutions including Bank of America, JPMorgan Chase, Goldman Sachs, and Deutsche Bank of failing to perform proper due diligence and missing evidence that borrowers’ incomes were inflated or falsified. More»

Downgrade could be worse: Neel Kashkari

(NEWSER) - If the debt follies in Washington result in US credit being downgraded, it could end up being a worse financial hit than the epic failure of Lehman Brothers, writes Neel Kashkari. The former assistant secretary to the Treasury, who was appointed by George W Bush to oversee the $700 billion bank bailout, notes the harsh lessons of 2008 and breaks down the similarities and differences between then and now in the Washington Post:

• Too safe to fail? Pre-2008, everyone "generally believed that major US investment banks were so large they would never be allowed to fail." But since US Treasurys have been the "risk-free" gold standard for decades, "a far bigger shock" than Lehman could occur.

Accounting firm helped Lehman Brothers cook the books, prosecutors allege

(NEWSER) - Ernst & Young is poised to become the first major accounting firm charged for having a hand in the financial crisis. New York prosecutors are planning to file civil fraud charges against the firm for the role it allegedly played in the collapse of Lehman Brothers, one of its biggest clients, the Wall Street Journal reports. Sources say Ernst & Young earned about $100 million for auditing Lehman Brothers between 2001 and 2008; now the firm is accused of standing by while the bank duped investors. More»

Fed chair defends financial crisis actions

(NEWSER) - The government must be ready to close even the biggest banks if they threaten to bring down the financial system, Ben Bernanke said today, in testimony before the Financial Crisis Inquiry Commission. "If the crisis has a single lesson, it is that the too-big-to-fail problem must be solved," the Fed chairman told commission, which is investigating the 2008 crash. "Too-big-to-fail financial institutions were both a source ... of the crisis and among the primary impediments to policymakers' efforts to contain it," he said. More»