Lehman execs, auditor blamed for company's collapse - The Globe and Mail

As the dust settles from the financial tempest of 2008 it is becoming apparent that blame cannot justifiably be assigned to any one party--although the actions of the Clinton Administration and HUD seem to bare the brunt of the condemnation from critics and apologists for laissez-faire ideology. Like the Enron scandal, it is becoming apparent that many parties were complicit in the actions that led to the near systemic collapse of the financial system.
The recent findings of the court-appointed examiner of the Lehman debacle found that trick accounting--not unlike Enron-- and deceptive valuation practices for their alchemic portfolios led to exasperating the disaster that was brewing beneath the surface of Wall Street. The examiner, Anton Valukas, stated that while some of Lehman's management's decisions “can be questioned in retrospect” and the firm's valuation procedures for its assets “may have been wanting,” those responsible for the firm had used their business judgment and were largely not liable for the firm's collapse. But in a contradictory manner he goes on to say that the Lehman bankruptcy estate creditors could have claims against --Dick Fuld and chief financial officers Chris O'Meara, Erin Callan and Ian Lowitt.

It is interesting that, like Enron and the Credit Rating scandal, two essential bulwarks of the financial system were debased.

• The notion of fiduciary duty was abused and exercised in an irresponsible manner.
• The duties of the firm's auditors had been carried out in a “negligent” manner and that Lehman could pursue claims against the firm for “professional malpractice.”

In both these cases--as has become common in our society--the spirit of the law is largely ignored while the letter of the law is manipulated by contemptible 'wordsmiths'

The time has come for 'the authorities' to quit attempting to assign blame, ostensibly to divert accountability and responsibility from themselves, and to make an attempt at restructuring the regulatory apparatus to reflect the changes that have taken place in the mechanics of finance. However any effort will prove to be feckless and ineffectual unless the presence of both intellectual and moral virtue is established and nurtured in the character of those that will lead capitalism out of its self imposed dark ages.
It is quite possible that a financial tempest of greater pugnacity is on the horizon--if so and the lessons from 2008 are not heeded, the power of capitalist dynamics will not be so forgiving.


Lehman execs, auditor blamed for company's collapse - The Globe and Mail