Lehman Brothers used accounting gimmicks to hide billions in debt and was insolvent for weeks before it filed for bankruptcy in September 2008.
That is the finding of a more than year-long investigation by a court-appointed examiner.
Ernst & Young, which audited Lehman’s accounts is criticised as possibly “negligent” and the examiner says it may face claims for “professional malpractice.”
Lehman’s collapse was the largest bankruptcy in US history and deepened the global financial crisis.
The report suggested that those who are working to complete Lehman’s bankruptcy could pursue claims through the courts against banks like JPMorgan and Citigroup for taking some 16 billion dollars in collateral out of Lehman’s coffers as it struggled to stay afloat.
Lehman’s ex bosses could also face claims.
And the examiner found that creditors’ claims could be made on assets held by Lehman affiliates that were transferred to British bank Barclays which bought Lehman’s core US brokerage after it filed for bankruptcy.