The Occupy Wall Street movement should brace itself for an influx of recruits hailing from its biggest foe.
The SEC's apparent intent to let Lehman Brothers and its executives off the hook for bringing the global financial system to its knees seems to have some of the biggest names on Wall Street ready to pack up their hacky sacks and Guy Fawkes masks and head down to Zuccotti Park.
On Thursday, Bloomberg reported an internal SEC memo indicated investigators have concluded their investigation and had found no basis for charges. We'd like to dub the reaction to this bombshell as "the collective head smack heard around the world."
It seemed impossible that the SEC would be unable or unwilling to find enough evidence that could stick, particularly given the details of a 2,200-page report authored by Anton Valukas released in 2010. Valukas, the lawyer appointed by the U.S. bankruptcy court to look into the Lehman fiasco, found Lehman's accounting to be "materially misleading," and its juggling of $50 billion off the balance sheet an act of "actionable balance sheet manipulation."
"The Valukas report raises the possibility that...the big Wall Street firms were engaged in Enron-style accounting fraud," wrote The New Yorker's John Cassidy in 2010.
No matter, says the SEC.
The revelation had Jim Cramer ready to dust off his law degree and join the ranks of Wall Street prosecutors.
"It is pathetic that the SEC doesn't have the gumption or the horsepower to pursue the Lehman case," wrote Cramer.
And Thursday wasn't just a good day for Lehman, it was winning on a Charlie Sheen-level. In addition to the SEC news, the judge presiding over a case brought by former shareholders against the firm and its executives approved a $90 million settlement. Woo-hoo, $90 million! ...to be paid entirely by Lehman's insurers. Cue sad trombone.
"While some may be concerned at the lack of any contribution by the former director and officer defendants to the settlement, lead counsel's judgment that the $90 million bird in the hand is worth at least as much as whatever is in the bush, discounted for the risk of an unsuccessful outcome of the case, is reasonable," wrote District court judge Lewis Kaplan in his opinion.
Simply replace "some" in the above quote with any of the following words and you'll feel better: most, all, everyone, people, anybody with a functioning brain…
- Lehman Brothers
- Wall Street