Just when you thought the prosecutors had thrown in the towel on Lehman Brothers (Lehman Brothers news), they leak news that an enforcement action targeting specific executives is on the way. Fox Business reports that the SEC could file charges imminently. "The rumor mill is that it could come as early as this week."

The specific focus is unknown, but the news service thinks it is a good bet that the March 2008 preferred deal will be one focus. "Erin Callan made some very positive bullish statements about Lehman. About how the nature of its finances would mean that it did not need more capital and three months later Lehman Brothers needed more capital and then came the decline of the firm."

The most likely to be charged are Erin Callan, former CFO; Ian Lowitt, the other former CFO; Joe Gregory, the former president; and Dick Fuld, the former CEO--all of whom are targets or people of material interest.

The news follows an intriguing analysis of the legal bills the estate of Lehman is paying for the executives. The amount of money being paid is apparently rising, as law firms seek more payments from insurance firms. It took more than a year to use up the $35 million provided by the first two insurance policies. But Weil Gotshal estimates that the third $35 million policy will be exhausted by the end of August and the next $10 million will be spent by the end of October, according to the New York Times.

So there seems to be a real spike in legal activity. We'll see what happens.

For more:
- here's the article from the New York Times

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