E&Y 'sat silently' as Lehmans tried to hide financial troubles

Ernst & Young (E&Y) "sat by silently" as Lehman Brothers tried to hide its financial problems from investors in the months before its collapse, US prosecutors have alleged in a lawsuit.

The action is the first to target a major accounting firm for its role in the financial crisis, the Telegraph reports. E&Y, one of the world's "Big Four" accounting firms, is alleged to have approved of Lehman's increasingly frequent use of a device known as Repo 105. This allowed the bank to sell troubled loans before it released results and then buy them back afterwards. The accountants made more than $150m (£96m) in fees auditing Lehman's books between 2001 and the 2008, according to the suit. Lehman Brothers collapse in September 2008 triggered a deepening of the financial...