Ernst & Young Could Face Fraud Charges in Lehman Bros. Collapse
By Ben Fractenberg
MANHATTAN — Attorney General Andrew Cuomo may file a civil lawsuit this week against the accounting firm Ernst & Young for actively ignoring evidence Lehman Brothers misled investors about its finances, the Wall Street Journal reported Sunday.
Lehman was reportedly one of the Ernst & Young’s biggest clients, earning the accounting firm about $100 million in fees from 2001 to 2008.
The possible suit is part of a larger investigation into banks that may have tried to mislead investors by hiding debt before financial filings.
Banks would allegedly hide loans, labeling them as "security sales" to keep their debt hidden from investors.
The attorney general’s office is reportedly looking into whether other banks hid debt.
The filing would reportedly be the first time New York's top prosecutors have gone after a big accounting firm for its role in the financial crisis.