About a dozen executives at Lehman Brothers Holdings Inc. have been subpoenaed for three grand jury investigations into the the investment bank's failure.
Prosecutors are investigating if Lehman executives made false comments
about the health of the firm prior to its collapse. Chief executive
Dick Fuld (pictured) could be one of those executives, according to
CNBC.
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The U.S. Attorney General's Offices in the eastern and southern districts of New York, and in the district of New Jersey are handling the probes.
While flipping through Lehman's books, prosecutors found that the U.S. unit owes the European unit $2 billion to $3 billion and the European unit owes the U.S. unit more than $8 billion, according to
Reuters. Oddly enough there is a disputed claim from the administrator of Lehman's European unit that $8 billion was transferred from Lehman Brothers European unit to the U.S. unit on the eve of Lehman's bankruptcy filing.
Many of the transactions were credit derivative transactions. Alvarez & Marsal, a restructuring firm, is unwinding 1.5 million derivative transactions involving about 8,000 counterparties, according to Reuters. The firm is still trying to locate data related to those trades. The task is so complex that the restructuring firm is requesting the number of employees be increased from 100 to 400.
Those who sold the CDS contracts have until Oct. 21 to settle their contracts. Auctions are being conducted by Creditex Group Inc. and Markit Group Ltd.
- Maria Woehr
