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October 21, 2013

EY US to pay $99m to Lehman Brothers investors

EY US has agreed to pay $99m to former Lehman Brothers investors who had accused the auditor of helping Lehman misstate its financial records before the bank’s collapse in 2008.

The firm said it denied all liability, but was settling the case "to put this matter behind us" in a statement.

Additionally, the firm said "Lehman’s audited financial statements clearly portrayed Lehman as what it was – a highly leveraged entity operating in a risky and volatile industry; and Lehman’s bankruptcy was not caused by any accounting issues."

The Lehman Brother collapse has been widely credited as the starting point of the global financial crisis that the world is still struggling with.

After the collapse, investors filed a lawsuit against a number of those involved with the bank, including EY, Lehman’s auditor between 2001 and 2008.

In January 2013 the UK FRC said it was to take no action against EY UK, and in June 2012 the firm was also cleared by the UK Accountancy and Actuarial Board (AADB).

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E&Y UK cleared over Lehman audits

FRC takes no action against E&Y over Lehman audit

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