Voodoo -- I don't know. I pulled this from the Lehman's Examiner Report (foget which post from this board has the link), in relation to request fo SEC documents, so I don't know if THJMW can say, you don't have to hand over something specific, but anything related that can be turned over better be. IMO that leaves a lot of wiggle room. Or does the examiner just do his best and fills in the gap, by saying something like" Washingtom Mutual should not have been sold for 1.9 billion. JPM and FDIC won't provide documentation to show how they came up with that number. SInce I don't believe 1.9 billion, my number based on my facts is ......"
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(a) SEC
In February 2008 the SEC commenced a special project to review the CSE’s price
verification processes for their CRE portfolios.805 Lehman cooperated with this process,
as did the four other CSE firms.806 The SEC did not produce a formal report for this
project and declined to provide the Examiner any formal conclusions produced in
connection with this project.807 However, the SEC provided the Examiner with its
informal analysis and comments during an interview.808
The SEC’s inspection included a review of the materials Lehman used in its price
verification process, and was initially focused on the marks reported as of January 31,
2008, and then as of February 29, 2008.809 The SEC began meeting with Lehman in
805 Memorandum from Raymond Doherty, SEC, et al., to Erik Sirri, SEC, et al., re: Scope Memorandum for
the Consolidated Supervised Entity (“CSE”) Commercial Real Estate (“CRE”) Price Verification
Inspections (Feb. 27, 2008), at p. 1 [LBEX-WGM 001752]. An e-mail widely circulated within Lehman
stated that “[t]he intent of the inspections program . . . is for the SEC to conduct meaningful and focused
inspections of the five CSE firms.” E-mail from Laura Vecchio, Lehman, to Christopher M. O’Meara,
Lehman, et al. (Jan. 22, 2008) [LBHI_SEC07940_068584]. The SEC’s letter to Lehman describing the scope
of the review stated that it would:
[F]ocus on (1) gaining a general understanding of the CRE products held in inventory by [Lehman],
including the related hedging strategies, (2) reviewing the price verification policies and procedures to
determine if appropriate valuation controls have been designed, and (3) testing the price verification
process to ensure that the controls are operating as intended. Ultimately, the staff will compare and
contrast the various CRE-related price verification policies and procedures across the five CSEs.
Memorandum from Raymond Doherty, SEC, et al., to Erik Sirri, SEC, et al., re: Scope Memorandum
for the Consolidated Supervised Entity (“CSE”) Commercial Real Estate (“CRE”) Price Verification
Inspections (Feb. 27, 2008), at p. 1 [LBEX-WGM 001752]
806 Examiner’s Interview of SEC staff, Aug. 24, 2009, at pp. 3-4, 13-14.
807 Id. at p. 14 (noting that the SEC never released its findings formally). The SEC expressed its concerns
informally throughout its inspection but no formal presentation was made .
808 Id. at passim.
809 Id.; Letter from Raymond Doherty, SEC, to Laura Vecchio, Lehman, re: Commercial Real Estate Price
Verification Inspection – Initial Document Request (Feb. 27, 2008), at p. 1 [LBEX-WGM 001754]; e-mail
from Thomas O’Dougherty, SEC, to Abebual A. Kebede, Lehman, et al. (Apr. 11, 2008)
