A Lehman Brothers whistleblower warned his bosses that accounting gimmicks the bank used before its collapse may have been illegal, his lawyer said Friday. Matthew Lee, a former Lehman senior vice president, was fired days after questioning the accounting tricks in a letter to his superiors, attorney Erwin Shustak said. Shustak gave a copy of the letter to The Associated Press. Lehman Brothers Holdings Inc. imploded in September 2008, becoming the biggest corporate bankruptcy in U.S. history. The collapse sent financial markets across the globe into a free-fall and prompted a massive bailout of the U.S. banking system. An examiner appointed by the bankruptcy court said in a 2,200-page report last week that Lehman hid its debt and perilous financial condition by using an accounting gimmick called Repo 105. The report revealed Lee’s warnings to the bank, though his letter makes public the first internal assessment of the legality.
Carl Icahn launches studio takeover bid
Activist shareholder Carl Icahn raised the stakes in his yearlong dispute with Lions Gate Entertainment Corp. on Friday, launching an all-out bid to take over the movie studio following disagreements over its spending. The hostile bid comes a week after Lions Gate rejected Icahn’s offer to buy a larger minority stake and rewrote its bylaws to make such a takeover attempt more difficult in the future. The new offer for all outstanding shares also raised the specter of Canadian government involvement because Icahn, an American, could own the Vancouver, B.C.,-based company and cause friction with the country’s cultural policies. Icahn owns almost 19 percent of Lions Gate, and his new offer for the remainder was unchanged from the $6 per share he offered last month when he sought to increase his stake to just under 30 percent.
Little regulation for organic food
The Department of Agriculture has failed to enforce penalties against some who falsely marketed foods as organic, according to an internal department investigation. A report by the agency’s inspector general says the agency needs to step up enforcement of those who sell products under the “USDA Organic” label but do not meet government standards to do so. The report says the department has made improvements in maintaining the integrity of the program in recent years, but needs to better handle complaints about violators. Oversight of the organic program has become more important and more scrutinized as the industry has exploded in popularity.
The Walgreens drugstore chain has stopped filling new prescriptions for the state’s Medicaid program because it says reimbursements do not cover its costs. A headline Friday for this column gave incorrect information about which subsidized program was affected by Walgreens’ decision.
From Herald news services