E&Y Moves Lehman Lawsuit to Fed Court

Submitted by Allison Schiff on Thu, 01/20/2011 - 13:58

According to Reuters, Ernst & Young (E&Y) has filed to have the civil fraud suit brought by the NYS attorney general’s office in December moved from state court to a federal venue.

The state’s suit revolves around the accusation that E&Y is implicated in the collapse of Lehman Brothers. E&Y is accused of perpetuating “massive accounting fraud” through the use of Repo 105 transactions that allegedly created a false impression of Lehman’s liquidity to the detriment of the investing public.

E&Y, claiming that the case centers on questions of federal auditing standards, wants the suit moved to the U.S. District Court for the Southern District of New York, reports Reuters. The firm cited U.S. securities law and the Sarbanes-Oxley to justify its request for the switch.

The court’s decision is outstanding.
 

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