Accounting giants Ernst & Young are being blamed and sued for the collapse of Lehman Brothers as they face accusations claiming they supposedly helped ‘hide billions of dollars in debt’.
Filed by New York Attorney General Andrew Cuomo, the legal action refers back to 2008 when Wall Street experienced its first milestone of the economic downturn. Evidently, just before the investment banks downfall, Ernst & Young helped Lehman Brothers violate a practice called Repo 105 which basically allowed them to deceive investors, concealing the amount of debt they were really in.
Despite the charged for the role they played in the demise of the investment bank, Ernst & Young have denied any wrongdoing, stating “There is no factual or legal basis for a claim to be brought against an auditor in this context where the accounting for the underlying transaction is in accordance with the Generally Accepted Accounting Principles.”
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