Execs, Auditors, Underwriters Must Face Suit by Lehman Investors, Court Rules

Investors who bought debt and equity securities of now failed Lehman Brothers Holdings Inc. largely may proceed with their lawsuit against Lehman’s former officers, directors, and auditors, as well as the underwriters of the securities, the U.S. District Court for the Southern District of New York concluded July 27 (In re Lehman Brothers Securities and ERISA Litigation).

In a 106-page opinion, Judge Lewis A. Kaplan said the plaintiffs adequately alleged that the defendants made materially misleading statements regarding Lehman’s use of “Repo 105 transactions” and their effect on the firm’s reported net leverage, its risk management practices, and ...