This is very similar to what Enron did, although the vehicle was different - they moved liabilities off the books to make themselves look less leveraged. Enron did this through shell companies owned by Fastow - Fuld&#x2F;Lehman did this through abusing a standard rule and then getting E&amp;Y to hold their nose and say that these transactions were not material and did not involve reporting the information to shareholders. To me, that&#x27;s fraud.<p>I&#x27;m not alone in this analysis:
&quot;The segment, which marks the first time Vakulas has been interviewed since filing his nine-volume, 2,200-page report two years ago, claims there is sufficient evidence to prosecute officials at Lehman. According to Vakulas, Lehman Brothers was intentionally misrepresenting their financial health.&quot;<p><a href="http:&#x2F;&#x2F;www.huffingtonpost.com&#x2F;2012&#x2F;04&#x2F;23&#x2F;lehman-brothers-investigator-60-minutes-fudged-numbers_n_1445421.html" rel="nofollow">http:&#x2F;&#x2F;www.huffingtonpost.com&#x2F;2012&#x2F;04&#x2F;23&#x2F;lehman-brothers-inv...</a><p>The key question, to me, is whether they knowingly misrepresented the health of the company in reporting to shareholders. If it ever went to trial I think the answer would be &quot;yes&quot; - but of course we&#x27;ll never know because no one in the US government wants to go after them.<p>At least the NY Attorney General went after E&amp;Y and extracted a minor settlement (albeit one with no admission of wrongdoing):<p><a href="http:&#x2F;&#x2F;www.nytimes.com&#x2F;2015&#x2F;04&#x2F;16&#x2F;business&#x2F;dealbook&#x2F;ernst-young-in-settlement-over-lehman-brothers.html?_r=0" rel="nofollow">http:&#x2F;&#x2F;www.nytimes.com&#x2F;2015&#x2F;04&#x2F;16&#x2F;business&#x2F;dealbook&#x2F;ernst-yo...</a>