Exercise 2-2: The Collapse of Lehman Brothers
As you watch the video, please respond to the following questions:
1. Should the SEC bring charges against the executives of Lehman Brothers?
Yes they should because Lehman was doing unethical operation for financial report. Also, SEC saw the
letter which was written about alleging unlawful accounting practice from one of Lehman’s worker whose
name is Matthew Lee to Lehman’s executive. However, SEC did not share this letter or information to
investors. SEC has duty to protect investors to give that kind of information. Therefore, SEC should have
shared this information to investors at that time.
2. What was Ernst & Young’s primary responsibility?
Ernst & Young is accounting firm for Lehman Brothers, so they had to check their financial report; is
Lehman Brothers following national law or rule when they make their financial statement? And, does
Lehman Brothers not to do unethical and unlawful movement in their financial transaction?
3. Should Ernst & Young be prosecuted? Why or why not?
Ernst should prosecuted because they ignore or cannot define Lehman’s allegation of unethical and
unlawful accounting practices.
