BBC Learning English

Words in the News

22nd December 2010
Ernst & Young sued over Lehman collapse

The attorney general of New York is suing accountants Ernst and Young over fraud linked to
the collapsed investment bank Lehman Brothers. The state's prosecutor is seeking at least
US$150 million in damages from the accountants. Caroline Hepker reports:

New York's attorney general, Andrew Cuomo, has accused one of America's leading
accounting firms of helping to hide massive accounting fraud at Lehman Brothers in the
years before the bank collapsed in September 2008.

Mr Cuomo says the accounting giant advised Lehman Brothers on obscuring US$50 billion
through so-called Repo 105 transactions, which temporarily move liabilities off balance
sheet. Ernst and Young has made no comment on the case, but the attorney general wants
the firm to repay fees it received, totalling US$150 million, plus damages to investors.

Ernst and Young was the outside auditor for Lehmans from 2001 until the firm's bankruptcy
in September 2008. The failure of what had been a leading global financial firm triggered a
crisis on Wall Street that tipped the world into deep recession.

Caroline Hepker, BBC News

Words in the News © British Broadcasting Corporation 2010

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Vocabulary and definitions

accounting firms companies that prepare and check accounts for businesses

fraud deception

collapsed suddenly failed

obscuring here, hiding or preventing the discovery of some financial

information

liabilities money that a person or business owes

balance sheet financial list to show what a company owns, owes and
what money or income it received in a specific year

made no comment did not say anything in public

auditor financial expert who checks accounts are completed

correctly

bankruptcy money ran out

tipped pushed

More on this story: http://www.bbc.co.uk/news/business-12057170

Read and listen to the story and the vocabulary online:
http://www.bbc.co.uk/worldservice/learningenglish/language/wordsinthenews/2010/12/101222_witn_ny_sues_accountants_page.shtml

Words in the News © British Broadcasting Corporation 2010

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