Charlie Gasparino: "SEC Charges Against Lehman Executives Appear Imminent"

FOX Business Network’s (FBN) Charlie Gasparino reports that the Security and Exchange Commission (SEC) may bring charges against former Lehman Brothers executives as early as this week. Excerpts of his report can be found below, courtesy of Fox Business Network. About the charges being brought against Lehman Brothers: “Sources close to the Lehman Brother’s investigation are telling Fox Business Network SEC charges against Lehman executives appear imminent. If you look at the amount of money being taken out of the Lehman estate to pay for the legal fees of Erin Callan, former CFO; Ian Lowitt, the other former CFO; Joe Gregory, the former president; and Dick Fuld, the former CEO; all people that are broadly known as targets or people of material interest by the SEC.” On why it is apparent that these charges are coming: “It has ramped up dramatically over the last three months. For the first year and a half since this became a matter of interest for the SEC, they spent about 35 million dollars in attorney fees. In the last two and half months they have spent 35 million. So this case, according to sources and that sort of analysis; everybody is in agreement this case is coming to a head.” On who the charges are directed towards: “I can tell you who they are focusing on, clearly its Erin Callan because of that capital raise. Clearly its Joe Gregory her boss who was the day to day executive, and Dick Fuld because he is the CEO. And there are others involved but we don’t know who else they are going to target in this case if and when they bring it because a lot of times these guys make deals.” On what the charges focus on: “At least part of it is focused on the March 2008 capital raise where they went out and did a preferred deal. Erin Callan made some very positive bullish statements about Lehman. About how the nature of its finances would mean that it did not need more capital and three months later Lehman Brothers needed more capital and then came the decline of the firm.” On what Lehman Brother’s has to say about the imminent charges: “We called each have every one of the lawyers for the people I mentioned and they have no comment.” On when the charges will be brought forth: “We understand this thing is imminent. The rumor mill is that it could come as early as this week.”