The lid comes off the Wall Street scandal?

(9 am. – promoted by ek hornbeck)

Chris Dodd Asks Department Of Justice To Probe Lehman’s Repo 105 And Other Firms’ Shady Accounting Practices   Zero Hedge

March 19, 2010

The Honorable Eric H. Holder, Jr.

Attorney General of the United States

United States Department of Justice

950 Pennsylvania Avenue, NW

Washington, D.C.  20530

Dear Attorney General Holder:

I am deeply concerned about the facts that have come to light regarding the demise of Lehman Brothers and the accounting manipulation that contributed to it. I respectfully ask you to commission a task force to investigate the Lehman situation as well as other companies that may have engaged in similar accounting manipulation with a view to prosecution of employees or agents who contributed to any violations of the law.    

According to the Report of the U.S. Trustee-appointed Examiner Anton R. Valukas, Lehman presented a misleading picture of its financial condition to the public by using extensive repurchase agreements known as Repo 105 transactions. The Examiner found that “Lehman did not disclose its use — or the significant magnitude of its use — of Repo 105 to the Government, to the rating agencies, to its investors, or to its own Board of Directors.” The result was to conceal its holdings of bad assets and to temporarily remove approximately $50 billion of assets from its balance sheet at the end of the first and second quarters of 2008. The Examiner found that Lehman used Repo 105 transactions for no other articulated purpose than to shrink its balance sheet at the quarter-end, in a manner that deceived investors and creditors about its true financial state and misleading others.    

We must work tirelessly to reduce the incidence of financial fraud in order to restore trust and confidence in the financial markets. A task force investigation and taking appropriate Federal actions in these matters will contribute to these goals.

Sincerely Christopher J. Dodd Chairman

After a week Chris Dodd, Chairman of the Senate Banking Committes, who is retiring at the end of this term, reluctantly does his duty. Perhaps now Justice can launch civil and criminal investigations and use the “charges pending” status to cut down on the annoying and embarrassing things that keep emerging about Wall Street’s behavior.

I honestly don’t know if this means a genuine investigation will begin or if the scale of the cover-up just escalates. Given electoral realities, what member of congress would chair an investigation. How can anyone at this point expect Holder’s Justice Department to do a vigorous job. Given the status of the White House as a Hedge Fund Democratic client of Wall Street, someone should demand an independent prosecutor, but who will step up even to make that demand? Bernie Sanders?

The curtain gets pulled back and The Powers That Be are caught in flagrante delicto. Their best hope is that the children will be confused and will look away. But even children will often ask: “What are they doing?” Our national psychosis has erupted into the public space. How many will be able to see just how crazy this all is? How many of those will have the courage to insist on change. Will the ghost of Sam Irving knock three times?

As the Dutch said while fighting the Spanish: “It is not necessary to have hope in order to persevere.”


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    • ARGeezer on March 20, 2010 at 06:41

    What do you think? Is this a turning point?

  1. amazed to a see a 13/4″ bullet proof partition from the top of the counters to just below the ceiling.  It wasnt there last month.  Maybe, they know something……?

  2. … didn’t it take them, like, eighty years (1568-1648)?

    Now that’s what I call perseverance.

  3. over a GOS, wrote a good diary about WHY Dodd is doing this.  Banger has it right, but there is another question.  How do the Republicans figure into this?  She guesses (only a guess) that maybe some Repug told Dodd that they would ask for an investigation, and follow through, just to make the Adminisration look bad.  Even though they are responsible for this mess in the first place.  

    I like that there might be SOME kind of investigation. Who knows what will happen?  Maybe they will get someone who takes their job seriously.

    I don’t think anything will happen that needs to really happen until the Next Shoe Drops and life gets much worse for the majority of Americans.

    • RUKind on March 22, 2010 at 15:01

    There’s still a ton to do on HCR. It will take years to get a decent handle on truly fixing it. But right now, there’s enough evidence 0n Lehman to prosecute and on Goldman Sachs to do a deeper investigation.

    It’d be nice to see the bastards stripped of their wealth and doing a bid.

    • Xanthe on March 22, 2010 at 15:25

    there will be no leadership in the Corporate House.  Without that leadership – nothing will happen in this divided country.  We’ve seen how the Insurance bill was allowed to play out.

    In looking over some of my past posts – it looks like I’m bashing Obama a lot.  I’m truly sorry to say I’m not sorry – some have said it’s early in his presidency, etc. But without his leadership and strong voice, nothing will come of this – but his words.

    I’m not saavy or anything like that – but sometimes it penetrates this working class skull.

    Also, the letter seems tepid to me.  After what this country has been thru – we don’t need tepid.

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