Stephen Foley: The familiar themes in Lehman's latest drama

US Outlook: In Enron the Play, the West End smash coming here to Broadway in the spring, "the Lehman Brothers" are depicted as conjoined twins in a single over-size suit jacket.

Don't be surprised if they get their own spin-off show. The bankruptcy court judge who just unsealed an examiner's report on the collapse of Lehman said the document reads "like a best-seller". Its author, the veteran lawyer Tony Valukas, might want to option the rights.

Mr Valukas's tale has more than a few echoes of Enron. There are the outrageous accounting fiddles, transactions designed to hide the deteriorating state of Lehman's finances and which got more desperate as the firm headed into its long death spiral. There is the accounting firm that failed to raise any red flags. There are culpable executives, including Dick Fuld, as the Kenneth Lay character who did not dig into details. On conference calls where analysts were misled over Lehman's leverage reduction, the hapless Erin Callan is a politer version of Jeff Skilling in a trouser suit. There is even a whistleblower, one Matthew Lee in the role of Sherron Watkins.

Of course, this is only one telling of the story, and from a lawyer appointed specifically to look for people that Lehman Brothers' creditors can sue to help recover some of their losses. Nonetheless, Mr Valukas set himself high burdens of evidence before making his accusations of negligence against Mr Fuld, Ernst & Young et al.

Those criticised in the report have their defences, although Ernst & Young yesterday sounded mealy-mouthed. It last audited Lehman in 2007, and had responsibility only for making sure it accorded with accounting standards, a spokesman said. In other words, all that stuff designed to make Lehman's leverage look less than it was, the repo practice that even Bart McDade, its head of equities, described as "another drug we are on", E&Y says: "Nothing to do wiv us, guvnor."

The firm is hardly in danger of going the way of Enron's auditor, Arthur Andersen; there's no sniff of shredded documents here. But let's hope it is reassuring its clients that it sees itself having a wider duty of care, as everyone inside an organisation does, to raise ethical red flags, as well as accounting ones.

This is what is so angering about the details set out by the examiner. Everyone appears to have been aware that the suddenly notorious Repo 105 was designed to flatter and to deceive, and concerned about "reputational risk" should it be discovered. What they don't appear to worry about is its legality, since they travelled an ocean to get legal cover for it.

Mr Valukas has discovered that Lehman operated in that space between the letter of the law and the spirit. It is time to perform this story for an audience: of 12 jurors.

Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
A scene from the video shows students mock rioting
newsSchool leaver's pic YouTube video features staging of a playground gun massacre
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
Morrissey pictured in 2013
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Robyn Lawley
ebookA unique anthology of reporting and analysis of a crucial period of history
i100  ... he was into holy war way before it was on trend
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmThe film is surprisingly witty, but could do with taking itself more seriously, says Geoffrey Macnab
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain