Posted on July 3rd, 2008 in Daily Mortgage/Housing News - The Real Story
Hat-tip to Bloomberg’s Jonathan Weil for this wonderful expose’ on Lehman.
Last week I put out a post called A Bear Stearn’s Smoking Gun, the Cancelled EverQuest IPO. The title speaks for itself… I feel a Bear Stearns fund called Everquest owned by Bear Stearns could be a smoking gun that proves intent to defraud. Everquest is where they were dumping toxic subprime paper as the market was collapsing. But that’s not so bad. What is bad is they were planning to IPO Everquest to unsuspecting investors. The IPO was abruptly cancelled when the Ralph Cioffi-led hedge funds collapsed last year. That proves premeditation in my opinion.
So, what did Lehman do last month in a fit of desperation? You guessed it…the same thing. Weil writes:
“So what does Lehman do? It sells billions of dollars of assets to a newly formed hedge fund that:
1) counts Lehman as a significant investor;
2) is run by seven recently departed Lehman executives;
3) is operating out of Lehman’s office space, three floors down from the office of Lehman’s corporate secretary.
You don’t need to know much more about Lehman’s transactions with the fund, R3 Capital Partners, to see the problem.”
This is a great story you can’t miss. -Best, Mr Mortgage
Source: Bloomberg http://www.bloomberg.com/apps/news?pid=20601110&sid=aYbKSTZ5ZYpM