Ernst & Young Settles With New York Over Lehman Brothers Repo 105 Deals

April 15, 2015 6:59 PM

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Accounting firm Ernst & Young Ernst & Young will pay $10 million to settle claims made by the State of New York it was complicit in enabling now-defunct investment bank Lehman Brothers to conceal its financial difficulties ahead of the firm’s September 2008 collapse. The settlement involves so-called Repo 105 transactions, which allowed the bank to temporarily remove tens of billions of dollars of securities from its balance sheet without disclosing the maneuvers to investors.

In a suit first brought by then attorney general and current governor Andrew Cuomo, the state alleged that E&Y approved Lehman’s accounting transactions and certified the bank’s financial statements despite knowing that the bank was not disclosing the Repo 105 transactions to investors in publicly d...

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