10/16/2012

SAN MATEO, CA - Congresswoman Jackie Speier (D-San Mateo/San Francisco) today commended the decision yesterday by U.S. District judge Lewis Kaplan, Southern District New York, that allows a lawsuit for fraud against the officers and directors of failed Lehman Brothers to move forward.

The suit is led by San Mateo County, joined by Monterey County, the Cities of Burbank, Ventura, Auburn, as well as the Contra Costa Water District, Vallejo Sanitation and Flood Control District, and Zenith Insurance Company in seeking to hold Lehman Brothers' officers and directors, and accountant liable for false statements Lehman Brothers made prior to selling investments to the public. It is the first decision in the country addressing individual investors' claims since Lehman's bankruptcy.

“It is shocking that more than four years later no one at Lehman has been held accountable for the failed—and possibly criminal—actions of its leadership.  State and local governments across the country who invested taxpayer dollars in supposedly safe “investment grade” Lehman securities had to cancel important projects, layoff employees and make other drastic service cuts to make up for their losses.

“San Mateo County alone lost more than $100 million in those “safe” investments. They lost, but others, like former Lehman CEO Richard Fuld, profited handsomely from Lehman’s reckless actions.

“I was particularly gratified that the Court allowed the claim of fraudulent conveyance of millions of dollars of real estate to his wife to proceed, calling the motion to dismiss “frivolous.” 

At a House Financial Services Committee hearing in April 2010, I questioned Mr. Fuld about the transfer of his $13 million Florida estate in November 2008 to his wife for $100. His claim that the transfer was not intended to shield his assets immediately following Lehman’s collapse was not just frivolous, it was ludicrous.

“It is about time that those whose greed, arrogance and fraud caused this crisis be held personally responsible.” 

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