The Fall Guy – Ernst & Young

source: http://finance.yahoo.com/tech-ticker/more-than-two-years-after-lehman%E2%80%99s-crash-ny%27s-cuomo-targets-auditor-ernst-&-young-535739.html?tickers=skf,xlf,bac,c,gs,^dji,^gspc&sec=topStories&pos=9&asset=&ccode=

EXCERPTS:

“The Wall Street Journal reports, New York Attorney General Andrew Cuomo [New York State’s next Governor] is ready to bring civil fraud charges against Lehman’s auditor Ernst & Young. The suit, which The WSJ reports could come as early as this week, would mark the first time a major accounting firm was targeted for its role in the 2008 financial crisis….

At the heart of the matter is the accounting technique known as ‘Repo 105.’  Lehman Brothers and other banks used the ‘trick’ to offload risk towards the end of a quarter, thereby making it appear the company’s financial situation was much more solid than it really was, only to buy back those risky assets at a later date.”

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