Report prompts SEC to look at other banks

We've been speculating about whether bank examiner Anton Valukas's scathing report on Lehman Brothers would prompt a move to prosecute former Lehman Brothers CEO Richard Fuld (Richard Fuld news).

The Associated Press reports that the report has prompted the SEC to take a look at a number of big firms in the heady days when several were in danger of collapse. Specific firms were not named, but you would have to think it includes all the big players, especially Bear Stearns (Bear Stearns news) and Merrill Lynch (Merrill Lynch news).

The use of repurchase agreements are thought to have been somewhat widely used, though Goldman Sachs (NYSE: GS) has come out and said it did not engage in similar transactions. You get the sense that there's some anger starting to boil over the fact that prosecutors seem to be lagging in their grasp of what actually happened, and that it took a bank examiner's report to get the issues back on the front burner.

At the same time, some politicians are angry with the SEC and Federal Reserve Board, who dispatched examiners to look at Lehman's books in 2008. Should they have also uncovered this? Did they deem the Repo 105 actions noncontroversial? The Fed had no mandate other than to safeguard the funds it lent under the primary dealer credit facility. And it had no authority over accounting. Still, a lot of questions linger. 

For more:
- here's the AP article

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