Lehman Brothers’ whistle blower was ousted: report

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(Reuters) – Lehman Brothers Holdings Inc ousted whistle blower Matthew Lee just weeks after he had raised concerns with Lehman’s auditor about the firm’s accounting in 2008, the Wall Street Journal said, citing people familiar with the matter.

Lee, a former senior vice president, Finance Division, in charge of global balance sheet and legal entity accounting, was let go in late June 2008 amid steep losses at the firm as it tried to wade through the global financial crisis, the paper said.

Lehman said at the time it let go Lee as part of a broader downsizing at the firm, the people told the paper.

Lehman filed for bankruptcy on September 15, 2008, listing more than $600 billion of assets, a portion of which were sold off to Britain’s Barclays Plc.

In 2008, Lee had raised concerns with Lehman’s auditor Ernst & Young about the firm’s accounting practices. On June 12 that year Lee informed Ernst & Young about Lehman’s use of $50 billion of Repo 105 transactions in the second quarter of 2008, the paper said.

On March 11, an examiner said Lehman used accounting gimmicks and had been insolvent for weeks before it filed for bankruptcy in September 2008.

Erwin Shustak, a lawyer for Matthew Lee, could not be immediately reached for comment by Reuters outside regular U.S. business hours.

(Reporting by Sakthi Prasad in Bangalore; Editing by David Holmes)

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