Personal Injury Law

In May 2008, Lehman Brothers senior vice president Matthew Lee sent a letter to company executives warning them that the bank's accounting practices may be construed as illegal. Last week, Lee's letter was made public in a 2,200 page report issued by the bankruptcy court.

The Lehman Brothers whistleblower discovered evidence that the bank was using an accounting trick called Repo 105 to hide its debt and fragile financial condition from shareholders. According to Lee's letter, the bank would regularly underreport their debt by $5 billion every month.

They accomplished this by generating complex transactions which sold "toxic" mortgage-backed securities at the end of each quarter in order to remove them from their balance sheet. Once regulators and shareholders had examined the balance sheet, the bank would buy back the securities.

In Lee's letter to company leaders, he indicated his belief that these practices were misleading to the public, violating ethical codes and securities law. Under the firm's code of ethics, he felt it necessary to disclose these transgressions.

Several days after receiving Lee's letter, Lehman Brothers fired the whistleblower, citing general layoffs as the reason. However, Lee firmly believes his termination was retaliation for bringing the bank's unethical practices to light.

Four months later, Lehman Brothers declared bankruptcy, starting the massive financial collapse of the American financial system that resulted in the largest global recession in decades.

Lee's whistleblower efforts, along with the bankruptcy court's report, most likely will become the basis for many civil and criminal lawsuits against Lehman Brothers in the months to come.

If you have information indicating that the government has been defrauded by the unethical actions of an individual or corporation, a qui tam attorney can help you bring a claim against the offender. If your whistleblower claim is successful, you may be eligible to receive a reward for your efforts.

If you have a whistleblower claim in the Washington, D.C. area, please contact the qui tam lawyers at Chaikin, Sherman, Cammarata & Siegel, P.C. today to schedule your free initial consultation.

Written by Andrew Martin: professional blogger and guru of misfortune.