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Review and then reform…

I’m planning to write about the new Senate draft of legislation but I wanted to bring up the general lack of discussion in the Congress about the findings of the Lehman Examiner.

The failure of Lehman represented the largest corporate failure ever (over $600 billion dollars), triggered a global financial meltdown and was exactly the same template of fraud as Enron…

The Lehman Examiner suggests that the SEC and the Federal Reserve failed in their oversight of this firm or deliberately concealed it’s true condition from investors.

The Senate Banking Committee has never held a hearing on the failure of Lehman Brothers…

I used to wonder why and now I wonder if they are afraid to start digging into the deep rot that exists on Wall Street… and if once begun there would be no easy end to the morass… or if powerful parties have dissuaded the Congressional leadership from shining any light on the corruption…

The problem with this lack of inquiry is that it erodes the peoples confidence in their system…

My Father, a retired CPA and early information systems builder for multinationals,  has told me of his deep concern for the future of our nation… it’s sad to hear the resignation in his voice… as he describes how the moral fiber of this nation has worn away… he speaks primarily as an accountant… he watched Enron and Worldcom cook their books… and now a whole industry moves things off balance sheet and fudges the numbers with the complicity of the regulators…

This financial crisis has worn away the confidence and good will of the people… especially as they see no one being punished… and Wall Street and multinationals getting richer… while Main Street coast to coast washes away…

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Robert Peston of the BBC wrote this about the Lehman and transparency on Friday, March 12…

~~~”… Repo 105″ is about to enter the lexicon of shameful accounting and financial techniques employed to hide risk from the markets.

According to Anton Valukas, the examiner appointed to investigate the collapse of Lehman Bros by a New York bankruptcy court, Lehman used Repo 105 to hide from creditors, markets, ratings agencies, regulators and even members of its own board quite how much it had borrowed relative to its capital.

Or to put it another way, the firm used Repo 105 to exaggerate its financial strength in 2008, which was when this really mattered because of widespread concerns about the robustness of many banks…”~~~

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Thank God for Senator Ted Kaufman… at least he is willing to confront the deep darkness of Wall Street… from his Senate floor speech today (ht ZeroHedge)

~~~ “Mr. President, last week’s revelations about Lehman Brothers reinforce what I’ve been saying for some time.

The folly of radical deregulation has given us financial institutions that are too big to fail, too big to manage, and too big to regulate.

If we have any hope of returning the rule of law to Wall Street, we need regulatory reform that the addresses this central reality.

As I said more than a year ago: “At the end of the day, this is a test of whether we have one justice system in this country or two.

If we don’t treat a Wall Street firm that defrauded investors of millions of dollars the same way we treat someone who stole 500 dollars from a cash register, then how can we expect our citizens to have faith in the rule of law?

For our economy to work for all Americans, investors must have confidence in the honest and open functioning of our financial markets. Our markets can only flourish when Americans again trust that they are fair, transparent, and accountable to the laws.”

The American people deserve no less.”~~~

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Let’s review and then reform… there is plenty of time to do it right…

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