Stan Feldman
2008-05-06 04:46:39 UTC
Lehman misled, SEPTA suit says
By ANDREW HARRIS
Bloomberg News
Lehman Brothers Holdings Inc., the fourth-biggest U.S. securities firm, and
three of its top officers misled investors about its losses from trading
subprime mortgage-backed securities, according to a lawsuit.
The allegations stem from the collapse last year of the U.S. market for
securities backed by loans made to borrowers with poor credit histories.
Lehman's net income declined 57 percent in the first quarter of 2008 because
of a $1.8 billion writedown on mortgage assets. The firm has eliminated
5,300 jobs since August.
Lehman's leadership, including Chief Executive Officer Richard S. Fuld Jr.,
made positive public statements from September 2006 to August 2007 about the
firm's financial condition while hiding bad news from its investors,
according to the complaint filed in Chicago federal court by the
Southeastern Pennsylvania Transportation Authority (SEPTA).
"Each of these defendants," including the firm, Fuld, Chief Financial
Officer Christopher O'Meara and Chief Operating Officer Joseph Gregory, knew
that adverse facts "had not been disclosed to, and were being concealed
from, the public," the authority's lawyers wrote.
Brian Finnegan, a spokesman for New York-based Lehman Brothers, declined to
comment on the filing. The firm in July disclosed it had "unrealized" losses
of $459 million from mortgages and mortgage-backed assets in the quarter
ending May 31 last year.
SEPTA seeks class-action status on behalf of all purchasers of the firm's
securities plus unspecified money damages. SEPTA operates bus, rail and
trolley service in the Philadelphia metropolitan area.
The case is Southeastern Pennsylvania Transportation Authority v. Lehman
Brothers Holdings, 08cv2431, Northern District of Illinois, Eastern Division
in Chicago.
http://www.delawareonline.com/apps/pbcs.dll/article?AID=/20080504/BUSINESS/805040352
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By ANDREW HARRIS
Bloomberg News
Lehman Brothers Holdings Inc., the fourth-biggest U.S. securities firm, and
three of its top officers misled investors about its losses from trading
subprime mortgage-backed securities, according to a lawsuit.
The allegations stem from the collapse last year of the U.S. market for
securities backed by loans made to borrowers with poor credit histories.
Lehman's net income declined 57 percent in the first quarter of 2008 because
of a $1.8 billion writedown on mortgage assets. The firm has eliminated
5,300 jobs since August.
Lehman's leadership, including Chief Executive Officer Richard S. Fuld Jr.,
made positive public statements from September 2006 to August 2007 about the
firm's financial condition while hiding bad news from its investors,
according to the complaint filed in Chicago federal court by the
Southeastern Pennsylvania Transportation Authority (SEPTA).
"Each of these defendants," including the firm, Fuld, Chief Financial
Officer Christopher O'Meara and Chief Operating Officer Joseph Gregory, knew
that adverse facts "had not been disclosed to, and were being concealed
from, the public," the authority's lawyers wrote.
Brian Finnegan, a spokesman for New York-based Lehman Brothers, declined to
comment on the filing. The firm in July disclosed it had "unrealized" losses
of $459 million from mortgages and mortgage-backed assets in the quarter
ending May 31 last year.
SEPTA seeks class-action status on behalf of all purchasers of the firm's
securities plus unspecified money damages. SEPTA operates bus, rail and
trolley service in the Philadelphia metropolitan area.
The case is Southeastern Pennsylvania Transportation Authority v. Lehman
Brothers Holdings, 08cv2431, Northern District of Illinois, Eastern Division
in Chicago.
http://www.delawareonline.com/apps/pbcs.dll/article?AID=/20080504/BUSINESS/805040352
***********************************************************
Stans Railpix railphotoexpress.com Store !!
http://www.cafepress.com/stans_railpix
Stan'S Railpix;-A-Rail-Photo-Gallery !!
http://www.trainweb.org/railpix
Will remain a FREE site with 2426+1/2 images posted.
***********************************************************