Dodd calls for Lehman Bros. investigation

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- A year and a half after Lehman Brothers' collapse, Senate Banking Committee Chairman Chris Dodd, D-Conn., is calling for a federal investigation into the "Lehman situation" and other companies that may have fudged their balance sheets, contributing to the financial crisis.

"We must work tirelessly to reduce the incidence of financial fraud in order to restore trust and confidence in the financial markets," Dodd wrote in a letter sent to Attorney General Eric Holder on Friday.

In response, the Justice Department said is reviewing the letter, according to Tracy Schmaler, a spokesperson from the agency.

The letter comes a week after a court-appointed bankruptcy examiner released a 2,200-page report about the demise of Lehman Brothers. The firm's bankruptcy filing on Sept. 15, 2008, was the largest Chapter 11 filing in U.S. history.

The report criticizes Lehman's use of an accounting trick called "Repo 105" to make its books look better.

Dodd released a draft bill on Monday aimed at preventing future Wall Street bailouts. The rule would create a new consumer regulator housed inside the Federal Reserve to ensure consumers get a fair shake with mortgages and credit cards. It would also trim the ranks of federal banking regulators and clarify the duties of remaining agencies.

In a speech on Monday, Sen. Ted Kaufman, D-Del., also called on President Obama to initiate a criminal and civil investigation of Lehman Brothers.

"It is high time that we return the rule of law to Wall Street, which has been seriously eroded by the deregulatory mind set that captured our regulatory agencies over the past 30 years," he said.

Kaufman called for an investigation not only of Lehman executives and its board of directors, but also its accounting firm Ernst & Young and foreign banks involved in the "Repo 105" transactions.

Dodd is retiring at the end of his current term after 30 years in the Senate. Kaufman, who replaced Joe Biden when Biden assumed the vice presidency, will not seek election; his successor will be decided in a special election this year. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,805.41 127.51 0.76%
Nasdaq 4,483.72 30.92 0.69%
S&P 500 1,964.58 13.76 0.71%
Treasuries 2.27 -0.00 -0.09%
Data as of 12:29am ET
Company Price Change % Change
Ford Motor Co 13.78 -0.62 -4.31%
Microsoft Corp 46.13 1.11 2.47%
Apple Inc 105.22 0.39 0.37%
Bank of America Corp... 16.72 0.12 0.72%
Yahoo! Inc 43.50 0.90 2.11%
Data as of Oct 24

Sections

New York headlines took a straight forward and direct approach with NYC's Ebola news. More

The midterm elections are around the corner, and the economy remains a top concern. With unemployment down and inflation low, why do people still feel the economy stinks? More

Shares of Facebook recently topped $80. They've more than quadrupled from their post-IPO lows of two years ago. Can Mark Zuckerberg keep the momentum in mobile going? More

Host a furniture market. Here's how small town High Point, N.C. rakes in this much money -- twice a year. More

If you're looking to fly this holiday season, the clock's ticking to get the best prices. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.