Court appointed examiner Anton Valukas report on the collapse of the investment banking giant Lehman Brothers could serve as a road map to prosecutions of high-ranking executives, and lead to wide ranging changes in banking regulations. Lehman's collapse in September, 2008 put tremendous stress on an already weakened global financial system. The report details how Lehman used a questionable accounting practice called "repo 105" to hide bad assets from investors and creditors. If prosecutors can show that Lehman executives, including CEO Richard Fuld, deliberately misled investors, those executives could face jail time.
Meanwhile, regulators in the U.S. and elsewhere are using the report to find out what went wrong at Lehman, and how to keep it from happening again.
What exactly is repo 105, and how did it contribute to Lehman's collapse? Will the Valukas Report lead to criminal proceedings against Lehman executives? What regulatory changes need to be made to make sure this doesn't happen again?
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In today's program we'll discuss the Valukas Report on the collapse of the Lehman Brothers. So let's get started.
First, we'll speak with Dr.Jiang Guohua, associate professor of accounting at the Guanghua School of Management at Peking University.
And after a short break, we'll speak with an American expert in law and investment banking about the legal implications of the Valukas Report.
Lehman CEO Richard Fuld has claimed he was unaware of the repo 105 practices Lehman used to hide bad assets from investors. But recent legislation in the U.S. is aimed at holding such executives accountable.
For more on the legal fallout of the Valukas Report we go now to Mr.Terry Connelly, Dean of the Ageno School of Business at Golden Gate University in San Francisco.
