Published on Sat, Mar 13, 2010 at 14:12 | Source : Reuters
Updated at Sat, Mar 13, 2010 at 15:41
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Lehman balance sheet massaging may not be unusual
On Wall Street, massaging the balance sheet is a time-honoured practice. But did Lehman Brothers Holding Inc cross a line in the routine manipulation of its balance sheet, as described by an independent examiner?
Lynn Turner, a former chief accountant for the Securities and Exchange Commission (SEC) and now senior advisor to the consulting firm LECG, said the decision by Lehman executives to make greater use of Repo 105 is consistent with what companies do when they get themselves into trouble.
"Companies never just fudge it a little bit," said Turner. "They start out just doing it a little bit and over time it grows and grows."
While Turner said he was not aware of the Repo 105 transactions during this time at the SEC, he said it is fair "to wonder if anyone else is doing it."
Turner added: "No one is going to stand up and say so."
