Charles wrote:FYI, the full text of paid WSJ articles can be accessed for free through Google News.

I found a free link to the full text by googling "Lehman Brothers Fraud" and then hitting the News link. I'd post the link but it only works from the Google News page. I've heard there is a trick to get around this, but I didn't make a note of it as I rarely read the WSJ.

Lehman May Be Victim of Fraud
By ANDREW MORSE
March 28, 2008 11:30 p.m.

TOKYO -- U.S. investment bank Lehman Brothers Inc. appears to have been a victim of a fraud in which swindlers used forged documents from one of Japan's biggest trading companies to bilk it out of as much as $250 million.

Late last year, a unit of the New York-based investment bank issued loans to a fund run by a medical consulting company owned by LTT Bio-Pharma Co., a Japanese biotechnology company based in Tokyo. The funds, which were to be used to help provide trade financing for hospitals buying medical equipment, were secured with certificates from Marubeni Corp., one of Japan's biggest trading firms.

Lehman grew concerned at the end of February when its funds were not repaid, according to a person familiar with the situation. The LTT Bio-Pharma subsidiary filed for bankruptcy protection on March 19.

Lehman officials acknowledged that the firm has filed a criminal complaint with Japanese police about the situation. A spokesman says the firm believes Marubeni is responsible for repaying Lehman, which is studying how it might proceed.

In a statement, Lehman said it was "working closely with the authorities to seek full recovery of funds it believes to have been fraudulently misappropriated."

News of the alleged fraud comes as uncertainty surrounds Lehman Brothers, one of Wall Street's most venerated names. Speculation that it could be the next financial institution to succumb to the current credit crunch have battered its shares, which have skidded 34% in the last month to $37.87.

It is unclear how much money Lehman extended to the fund, but a person familiar with the situation said it could be around $250 million.

Marubeni, which fired two employees who may have been involved in the alleged swindle, also acknowledged the incident occurred but says it is a victim of identity theft. "This does not involve our company," a spokesman said. "We have no obligation."

LTT Bio-Pharma couldn't be reached immediately for comment.

Lehman says several meetings between its employees and representatives of the fund met at Marubeni's headquarters in Tokyo to discuss the deal. It says Marubeni employees were involved in the discussions.

Marubeni disputes this, saying its employees never met with Lehman representatives. Both companies are cooperating with Japanese authorities investigating the situation.

Takechanpoo wrote:Ridiculous
Originally Lehman or the other Judea-AngloSaxon vulture funds itself is fraud
Zamamiro!!!:nihonjin:

Takechanpoo wrote:Ridiculous
Originally Lehman or the other Judea-AngloSaxon vulture funds itself is fraud
Zamamiro!!!:nihonjin:

Lehman Brothers Holdings Inc. said it plans legal action against Marubeni Corp. to recover funds ``fraudulently misappropriated.'' Marubeni said it's also a victim in the fraud that media reports put at as much as $403 million. The Wall Street Journal reported today that Lehman loaned funds to a consulting company owned by LTT Bio-Pharma Co. to buy medical equipment. The loan appeared to be guaranteed by Marubeni and involved forged documents, the Journal said. "We are confident in our legal claim, which we will pursue until we receive repayment from Marubeni," said Matthew Russell, head of corporate communications for the Asia-Pacific region at Lehman in Hong Kong. He declined to comment on the amount being sought or other companies involved. Marubeni, Japan's biggest petrochemical importer, is also a victim of fraud and was not involved in the transaction, the company said in a Japanese-language statement faxed to Bloomberg News. Takashi Hashimoto, a spokesman for the Tokyo-based trading house, declined to comment on Lehman's planned legal action.

The funds loaned to the medical consulting company range from 24 billion yen to 40 billion yen ($242 million to $403 million), according the Nikkei and Tokyo newspapers. Both newspapers cited unidentified people familiar with the situation. The Wall Street Journal put the amount at about $250 million. "After we became aware of the fraud, we launched a fact- finding investigation and then informed the appropriate authorities," Lehman said in an e-mailed statement earlier today. "We are confident that we undertook all the appropriate measures on the transaction and will commence legal action against Marubeni."

Criminal Complaint

Lehman officials said they have filed a criminal complaint with Japanese police, the Wall Street Journal reported. The medical consulting company is called Asclepius Ltd., which initiated bankruptcy proceedings March 19, the Nikkei newspaper said. A call to the main switchboard at LTT Bio- Pharma reached a recorded message saying the office is closed today and tomorrow.

LTT Bio-Pharma is a Tokyo-based biotechnology company that researches and sells drug-delivery systems to treat arteriosclerosis. The company went public in November 2004 on the Tokyo Stock Exchange Mothers market. The shares have fallen 82 percent in the past 12 months. The planned legal action by Lehman in Japan comes as U.S. regulators are investigating whether traders spread false rumors about the company's financial soundness to profit from a decline in its share price. The Securities and Exchange Commission inquiry isn't public. Lehman, the fourth-largest U.S. securities firm, has tumbled 23 percent this month amid speculation that Wall Street firms can't fund their operations.

article wrote:..The loan appeared to be guaranteed by Marubeni and involved forged documents..

Mulboyne wrote:

...Matthew Russell, a senior spokesman for Lehman Brothers Holdings Inc., said that Japanese trading giant Marubeni Corp. secured the loans and should repay them...Marubeni said in a statement Saturday that it did not secure the loans and that documents to that effect were fake. It contends that it is also a victim of the alleged fraud and therefore should not have to cover any damages...LTT Bio-Pharma acknowledged in a statement this month that its unit's bankruptcy was related to "an alleged illegal transaction." Marubeni fired two of its employees after acknowledging that they may have collaborated with the fund's managers to forge documents, according to the statement. It added that Marubeni has filed a separate criminal complaint against the fund's managers. "We have nothing to do with the fraudulent acts, and we have no obligation to cover any repayment requests," Marubeni said. Russell said that his company has been "working closely with the (Japanese) authorities on a fraud it uncovered that was perpetrated by employees at Marubeni ... at the company's offices." He said Lehman is among "several financial institutions and other parties" that have been allegedly defrauded. Russell said meetings were held at Marubeni's office to discuss the funds before the agreement was struck late last year. He declined to discuss the amount of the loans or details of the transactions, citing a continuing police probe. "Lehman Brothers is confident that it undertook all the appropriate measures on the transaction," Russell said, adding that his company "is confident in its legal case and fully expects its funds to be repaid."

Japan's Marubeni Corp. Saturday rejected a 352-million-dollar lawsuit by Lehman Brothers over a bogus investment scheme allegedly involving two employees of the trading giant. In a statement, Marubeni said it had "no payment obligation whatsoever" to the US investment bank, which two weeks ago filed a lawsuit with the Tokyo District Court seeking compensation as a victim of fraud. "The case would never have occurred if Lehman had exercised the due care typically expected and required in light of the extraordinary financial amount of the alleged transaction," Marubeni said..."The transaction in question was so irregular, and from the amateurish contents of the forged documents, (that) Lehman should have naturally been suspicious"...more...

Mulboyne wrote:AFP: Japan's Marubeni rejects Lehman Bros suit

Lehman Brothers Holdings Inc. may avoid losses as a result of an alleged fraud involving Marubeni Corp. because the bank was insured, Kyodo News reported, without saying where it got the information. Lehman was protected by insurance policies that cover investment losses because of flaws in contracts, unidentified sources said, according to the news agency. The company needs to file a lawsuit in order to get an insurance payout. Lehman sued Marubeni for 35.2 billion yen ($353 million) on March 31, claiming it was the victim of a fraud involving employees at the Japanese trading company that included forged documents and a phony executive. Lehman provided the funds for a hospital investment business backed by guarantees from Marubeni, people familiar with the matter told Bloomberg News. Marubeni issued a statement today reiterating it wasn't responsible for the fraud.

Mulboyne wrote:Bloomberg: Lehman May Be Insured for Possible Marubeni Losses, Kyodo Says

Greji wrote:I think L. Bros are right on and Maruchan is going to have to pay up, unless they can conform to J-culture by doing the honorable thing and purchasing the Judge outright, prior to the litigation.

Mulboyne wrote:They have a direct interest in either establishing that Marubeni is responsible for its employees or else that Lehman was negligent in order to avoid paying out on any claim.

Takechanpoo wrote:Sneak AngloSaxon vulture dudes trying to justify their sneak tax evasion(fraud).
AngloSaxon dudes have nothing but the ability to steal someone's money.
Fuck off, sneak-thief AngloSaxon dudes as soon as possible.

Catoneinutica wrote:See, Take, here's the thing about vulture funds. Other countries invest their money instead of spending it like drunken sailors, the way Japan spent its money during the bubble. Now the grasshopper (Japan) has nothing but abandoned theme parks, skating rinks, observation towers, golf courses, etc, and the ants (other countries' vulture funds) are able buy Jap companies on the cheap. And Japanese have to drink third-tier pseudo beer.

Mulboyne wrote:Economist: My bow is my bond