Ernst & Young faces lawsuit over Lehman

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More than two years after Lehman Brothers was at the epicenter of a financial crisis that nearly brought the global economy to its knees, regulators are preparing to file the first major legal action stemming from the collapse of the investment bank.

The charges, however, are not expected to be filed against senior executives at Lehman, but rather against the accountants who audited the firm’s financial statements.

A civil fraud case could be brought by the New York attorney general against the accounting firm Ernst & Young as soon as this week, according to a person briefed on the matter. Ernest & Young certified the financial statements of Lehman from 2001 until the firm’s collapse in September 2008.

The move by the New York attorney general, Andrew M. Cuomo — coming just days before he is to be sworn in as New York’s governor — could spur other regulators to act. Both the Justice Department and the Securities and Exchange Commission have been investigating the collapse of Lehman.

Those investigations commenced not long after the firm’s bankruptcy filing. Several Wall Street firms were subpoened in 2008, seeking information about whether their analysts were misled by Lehman about its financial health, according to people familiar with the matter. Yet no executive or officer of Lehman — including Richard S. Fuld Jr., its longtime chief executive — have faced charges connected to the collapse.

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