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Bachus Seeks Fed, SEC E-Mails in Examination of Lehman Collapse...

Where's the smoking gun? It's somewhere, and I have a feeling someone is going to find it.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aQd.TdqyKqFU

Bachus Seeks Fed, SEC E-Mails in Examination of Lehman Collapse
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By Jesse Westbrook

March 26 (Bloomberg) -- U.S. Representative Spencer Bachus wants to review communications between the Federal Reserve and the Securities and Exchange Commission about Lehman Brothers Holdings Inc. as he scrutinizes whether the government failed to prevent accounting lapses at the bankrupt investment bank.

Bachus, the top Republican on the House Financial Services Committee, sent a letter yesterday to Lehman bankruptcy examiner Anton Valukas requesting e-mails, phone records and interview notes used to write a 2,200-page report on the firm’s September 2008 collapse. In his March 11 report, Valukas said Lehman misled investors about its financial state by moving billions of dollars of assets off its books at the close of quarters.

Lehman “used accounting gimmicks to hide its debt and mask its insolvency,” Alabama’s Bachus wrote in the letter to Valukas, which was released today. “More disturbing, the examiner’s report also describes what appear to be significant failings on the part of officials” at the SEC and the Federal Reserve Bank of New York.

Lehman filed the biggest bankruptcy in U.S. history after losses on mortgage-backed securities triggered a run by clients. The Wall Street firm’s failure helped freeze global credit markets, forcing the U.S. to provide $700 billion in bailout funds to banks.

Bachus is seeking communications between the Fed, SEC and Treasury Department in preparation for an April 20 Financial Services Committee hearing on Valukas’s findings. Bachus wants to hear testimony from Treasury Secretary Timothy F. Geithner, who was president of the New York Fed at the time of Lehman’s collapse, and former SEC Chairman Christopher Cox.

In addition to e-mails and phone records, Bachus also asked Valukas to provide notes, summaries and any exhibits relating to the examiner’s interviews of Geithner, Cox, Fed Chairman Ben S. Bernanke and other government officials.

The Fed and SEC employees were onsite at New York-based Lehman from March 2008 until its September collapse, monitoring its liquidity pool and financial health.

To contact the reporter on this story: Jesse Westbrook in Washington at [e-mail].
Last Updated: March 26, 2010 10:54 EDT