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The examiner in charge of investigating the bankruptcy of venerable Wall Street investment house Lehman Brothers, the most expensive bankruptcy in U.S. history, said in a report publicly released Thursday that senior officials failed to disclose key practices, opening them up to legal claims, and that JPMorgan Chase and Citigroup contributed to the firm’s collapse. In addition, the report concludes that the firm’s auditor, Ernst & Young, failed to meet “professional standards.”

The exhaustive report was unsealed today by Judge James M. Peck, who said the report reads “like a best-seller.”

The examiner, Anton Valukas, also found that parties have claims to pursue against JPMorgan Chase and Citibank in connection with their behavior regarding the modification of agreements with Lehman and their increasing collateral demands in Lehman’s final days. These demands had a “direct impact” on Lehman’s diminishing liquidity — its cash on hand — which was a prime reason behind the firm’s demise.

“Citi is reviewing the report, which is over 2,000 pages long, but notes that, based on its preliminary review, the examiner has not identified any wrongdoing on Citi’s part — or anything that would suggest that Citigroup helped cause Lehman’s collapse,” said Danielle Romero-Apsilos, director of corporate affairs for Citi Institutional Clients Group.

The examiner’s report notes:

The business decisions that brought Lehman to its crisis of confidence may have been in error but were largely within the business judgment rule.The business decisions that brought Lehman to its crisis of confidence may have been in error but were largely within the business judgment rule.

But the decision not to disclose the effects of those judgments does give rise to colorable claims against the senior officers who oversaw and certified misleading financial statements — Lehman’s CEO Richard S. Fuld, Jr., and its CFOs Christopher O’Meara, Erin M. Callan and Ian T. LowittThe examiner defines a “colorable claim” as those for which the examiner “found that there is sufficient credible evidence to support a finding by a trier of fact.” In other words, plaintiffs can start lining up.

The examiner notes that the issue giving rise to these potential claims was Lehman’s creative use of repurchase agreements, otherwise known as repo. These are agreements between financial firms that essentially act as loans for cash — one firm pledges collateral to another in exchange for cash with a promise that they’ll buy back that collateral.

The examiner said the sole function of Lehman’s use of repo was “balance sheet manipulation,” according to the report:

Although Repo 105 transactions may not have been inherently improper, there is a colorable claim that their sole function as employed by Lehman was balance sheet manipulation. Lehman’s own accounting personnel described Repo 105 transactions as an “accounting gimmick” and a “lazy way of managing the balance sheet as opposed to legitimately meeting balance sheet targets at quarter end.” Lehman used Repo 105 “to reduce balance sheet at the quarter?end.”

The reason for that, the report notes, was to lower Lehman’s leverage — a critical component of the firm’s credit rating.

In 2007?08, Lehman knew that net leverage numbers were critical to the rating agencies and to counterparty confidence. Its ability to deleverage by selling assets was severely limited by the illiquidity and depressed prices of the assets it had accumulated.

Against this backdrop, Lehman turned to Repo 105 transactions to temporarily remove $50 billion of assets from its balance sheet at first and second quarter ends in 2008 so that it could report significantly lower net leverage numbers than reality.

Lehman did so despite its understanding that none of its peers used similar accounting at that time to arrive at their leverage numbers, to which Lehman would be compared…

Lehman’s failure to disclose the use of an accounting device to significantly and temporarily lower leverage, at the same time that it affirmatively represented those “low” leverage numbers to investors as positive news, created a misleading portrayal of Lehman’s true financial health.

Colorable claims exist against the senior officers who were responsible for balance sheet management and financial disclosure, who signed and certified Lehman’s financial statements and who failed to disclose Lehman’s use and extent of Repo 105 transactions to manage its balance sheet.

But Lehman wasn’t alone in its gimmickry. The firm’s auditor, Ernst & Young, one of the four biggest auditing firms in the world, failed in its oversight role:

In May 2008, a Lehman Senior Vice President, Matthew Lee, wrote a letter to management alleging accounting improprieties; in the course of investigating the allegations, Ernst & Young was advised by Lee on June 12, 2008 that Lehman used $50 billion of Repo 105 transactions to temporarily move assets off balance sheet and quarter end.

The next day ?- on June 13, 2008 ?- Ernst & Young met with the Lehman Board Audit Committee but did not advise it about Lee’s assertions, despite an express direction from the Committee to advise on all allegations raised by Lee.

Ernst & Young took virtually no action to investigate the Repo 105 allegations. Ernst & Young
took no steps to question or challenge the non?disclosure by Lehman of its use of $50 billion of temporary, off?balance sheet transactions.

Colorable claims exist that Ernst & Young did not meet professional standards, both in investigating Lee’s allegations and in connection with its audit and review of Lehman’s financial statements.

In total, the examiner collected in excess of five million documents, estimated to
comprise more than 40,000,000 pages

Although a handful of subpoenas were threatened and in a few cases served, ultimately Valukas received nearly all requested documents voluntarily.

In all, more than 250 individuals were interviewed:

There was only one individual the Examiner sought to interview but could not. The Examiner requested an interview with Hector Sants, chief executive of the UK’s Financial Services Authority (“FSA”), to discuss the FSA’s involvement in the events of Lehman Weekend and the Barclays transaction. The FSA considered the request, but did not make Mr. Sants available for an interview. However, the FSA did provide detailed, written answers to specific questions that would have been posed to Mr. Sants.

SOURCE=http://www.huffingtonpost.com

Here she is in Abu Dhabi presenting a lifetime achievement award to Moroccan hurdler Nawal El Moutawakel at the Laureus World Sports Awards on Wednesday.

Editor’s note: Cisco made headlines today announcing a next generation router that will revolutionize the internet by increasing downloads to unheard of speeds. The Cisco press release makes the following claims about the CRS-3 router:

It enables the entire printed collection of the Library of Congress to be downloaded in just over one second; every man, woman and child in China to make a video call, simultaneously; and every motion picture ever created to be streamed in less than four minutes.

Tech Ticker interviewed Kelly Ahuja, Cisco Senior Vice President and General Manager Service Provider Routing Technology Group about the new product this afternoon. He answered all our questions but one: When will consumers be able to take advantage of this new high speed internet? Perhaps that’s because that part of the equation is up to our internet service providers. Until they upgrade it might as well all be a dream.

Below is Kara Swisher’s take on the new product.

Provided by All Things D, March 9, 2010:

Cisco today announced a new version of its key routing system, which the networking giant said has a dozen times the traffic capacity of competitors and three times as much as the company’s previous version.

Cisco’s CEO John Chambers said the CRS-3 Carrier Routing System is aimed at the huge growth in video on the Internet, a trend that has also caused slowdowns.

Pankaj Patel, SVP and GM for the service provider business, claimed the system could in just a few minutes deliver all the movies ever made or allow everyone in China to make a video phone call at once.

It had better. The consumption of video online is growing like crazy and a constant bottleneck is likely without some relief.

“Video brings the Internet to life,” said Chambers. “You are moving from a messaging platform to a video platform.”

Along with Chambers and Patel, AT&T (T) Labs CEO and President Keith Cambron was on the call discussing deployment trials the telecom giant has been doing with the CRS-3. CRS-3 (pictured here) will be available within the calendar year, said the Cisco execs on a press and analyst call this morning.

Cisco had said weeks ago that it was making “a significant announcement that will forever change the Internet and its impact on consumers, businesses and governments.”

Significant? We’ll see, of course. For sure, it was a highly hyped announcement by Chambers. But due to the speculation about what Cisco was unveiling, its stock hit a 52-week high yesterday. It dropped slightly this morning after the call.

Many others are getting into the high-speed act on the Web. Google (GOOG) said recently that it is planning on building a superfast broadband service. In addition, the Federal Communications Commission is set to unveil its own ambitious plan to improve high-speed Internet access across the United States.

Cisco has gotten deep into the video business of late, both in pushing its networking gear and in acquiring a video device maker like Pure Digital, the company behind my beloved Flip digital camera.

It is also working on innovative holographic and television-based home telepresence technologies.
source=www.yahoo.com

Intelius, a directing internet information commerce retail merchant, now declared that they’re connecting, as a founding member, an absolute working party, conducted by the Center for Democracy & Technology (CDT), to produce best practices for net retail merchants, when providing extra subscription products and services. The fresh working party will convene industry leaders and consumer urges to build a set of guidelines for specified offers. Intelius has committed $250,000 to the working party.

J. Adler, Chief Privacy Officer of Intelius told that: Intelius is committed to offering the good shopping experience for our clients. Presently, there are no consistent, domestic guidelines on how retail merchant should introduce extra offers to consumers during their internet check out process. This group will arrange clear-cut guidelines that balance consumer security and industry obligation, filling up the void that now survives so consumers can be better attended.

Net commerce is comparatively young and standards are still coming forth. Through this working party, industry and consumer advocacy groups will close to produce reasonable guidelines for internet marketing to consumers.

A. Schwartz, V.P. and CEO of CDT told that: Consumer advocates, retail merchants, consumers and governors can all take benefit from consistent criteria for marketing on the net. One of the challenges that must be speaking is how to distinctly specify standards for purchases made by third-party advertisers that the consumer has no former relationship and may ne’er even have detected before. This working party will be an aim to address consumer interests and offer clear-cut guidelines to the industry. We’re happy that Intelius has acquired a leading role in building up this significant initiative.

Extra members are boosted to join this working party.

The total jackpot for matching the winning six number has been raised to a whopping nineteen million dollars in the Florida Lottery after the most recent draw failed to be matched by any ticket holder. Although this Florida Lottery went without a jackpot winner there were quite a number of people who managed to match five of this six numbers.

The Florida Lottery draws are held twice a week on Wednesdays and Saturdays at quarter past eleven at night. Tickets for the Florida Lottery can be purchased from many retailers until twenty minutes before eleven p.m, if the tickets are purchased after that time they are deferred to the next lottery draw automatically. There are further options in the lottery with the most popular one being Xtra. The Xtra ticket has to be asked for at the retailer and it has the option of multiplying your winnings by the amount you pay.

The winning six numbers that were drawn on Wednesday this time around for the Florida Lottery were twenty-one, thirty-three, thirty-four, thirty-eight, forty-three and forty-four. A lot of the numbers were close to each other as you can see three numbers in the thirties and the total range lying between twenty-one and forty-four, a range of only twenty-three numbers.

The thirty-three tickets that matched the five numbers will be receiving a total amount of six thousand two hundred and forty-one dollars while the more than two thousand tickets that matched four of the numbers will receive an amount of eighty dollars each.

NEW YORK (MarketWatch) — Treasury prices and the U.S. dollar extended gains on Tuesday after an index by S&P/Case-Shiller showed home prices declined 0.2% in December, making a 1.1% drop in the fourth quarter. Yields on 10-year notes /quotes/comstock/31*!ust10y (UST10Y 3.72, -0.08, -2.06%) , which move inversely to prices, fell 2 basis points to 3.77%. The dollar index /quotes/comstock/11j!i:dxy0 (DXY 80.86, +0.35, +0.44%) , which measures the U.S. unit against a trade-weighted basket of six major currencies, traded at 80.704, up from 80.638 before the report and 80.513 in late North American trading Monday. Treasurys and the dollar were higher before the report on weak data and commentary from Germany and the U.K. Still to come is the Treasury’s sale of $44 billion in 2-year notes /quotes/comstock/31*!ust2yr (UST2YR 0.84, -0.04, -4.22%) and a report on consumer confidence.

Bay County, Fla:

Bay County ranked 36 out of 67 as the healthiest county in Florida according to a new report released today by the University of Wisconsin Population Health Institute and the Robert Wood Johnson Foundation. The County Health Rankings are the first to rank the overall health of the counties in all 50 states – more than 3,000 total – by using a standard formula to measure how healthy people are and how long they live.

Here is how Bay County ranked in specific categories:

Health Outcomes – 36
(how healthy a county is)

Health Factors – 26
(what influences health of county)

Health Behaviors – 32
(smoking, diet, exercise, alcohol use)

Clinical Care – 35
(access to care, quality of care)

Social & Economic Factors – 20
(education, employment, income, safety)

Physical Environment – 38
(Air quality, built environment)

Mortality – 38
(length of life, premature death)

Morbidity – 31
(quality of life, low birth weight)

“Expanding access to care is a goal of all health care providers in our community,” stated Gulf Coast Medical Center CEO Brian Baumgardner. Through our hospital’s Commit to Fit program, we have provided free health screenings and other resources to more than 10,000 Bay County residents in the last two years. Through our community and employer relationships we are helping detect emerging health issues before they become medical emergencies.”

“Bay County has a history of working together to address community issues. The impressive cooperative efforts in public health should be recognized and built upon to further address public health issues and improve health outcomes,” said Dennis Cookro, Acting Director, Bay County Health Department. Some successful efforts in Bay County include:

Health Behaviors
• Gulf Coast Medical Center, Bay Medical Center and Health South Rehabilitation Hospital adopting tobacco free campus policy
• Increased provision of tobacco cessation classes and services.
• Bay Medical Center received a 3-year grant in 2009 for community tobacco cessation education and in-patient cessation support.
• Artful Truth program by the Tobacco Free Partnership and Students Working Against Tobacco in partnership with Girls Inc. and Bay District Schools. Showcases youth art projects with anti-tobacco message.
• Smoking rates among adults decreased from 29% in 2002 to 22% in 2007.
• Increased education and self-management services for diabetics through a community partnership between Bay Medical Center, Community Health Center, St. Andrew Medical Clinic, and the Bay County Health Department.
• Creation of work site wellness programs to address health risk factors and healthy lifestyle behaviors.
• Gulf Coast Medical Center worked with area physicians to develop in-patient smoking cessation protocols.
• Creation of the Bay Substance Abuse Prevention Coalition to address underage drinking and prescription drug abuse.

Clinical Care
• Creation of the St. Andrew Community Medical Clinic and the Community Health Center to address health care access. Includes assistance with prescription medication and dental services.
• Annual free school sports physicals provided through a partnership between the Bays Medical Society, Medical Reserve Corps, Bay District Schools, and the Bay County Health Department.
• Bay Medical Center offers free monthly glucose screenings and annual pediatric asthma screenings. They also provide asthma education in local schools.
• Gulf Coast Medical Center’s Commit to Fit program provides employers and community groups more than 20 free screenings.

Social and Economic
• Targeted reduction of “meth labs” by local law enforcement.

Physical Environment
• Healthy Beaches monitoring program conducted by the Bay County Health Department.
• Creation and improvement of walking parks throughout the county.

“I think it is important to remember that this is not a ranking of county health departments but rather the health of the community. Much of what influences how healthy we are and how long we live happens outside the doctor’s office, clinic or hospital. As a community, we should use the results of the County Health Rankings to spur all sectors – government, business, community and faith-based groups, education and public health – to work together on solutions that address barriers to good health. We should celebrate our successes and mobilize community leaders to invest in programs and policy changes that will improve health in Bay County.” said Dennis Cookro, M.D., M.P.H., Acting Director of the Bay County Health Department.

For information on how surrounding counties ranked, go to the online report, available at www.countyhealthrankings.org. The report includes a snapshot of each county in Florida with a color-coded map comparing each county’s overall health ranking. Researchers used five measures to assess the level of overall health or “health outcomes” for Florida by county: the rate of people dying before age 75, the percent of people who report being in fair or poor health, the numbers of days people report being in poor physical and poor mental health, and the rate of low-birthweight infants. The report then looks at factors that affect people’s health within four categories: health behavior, clinical care, social and economic factors, and physical environment. Specific health factors looked at included rates of adult smoking, adult obesity, binge drinking, and teenage pregnancy; the number of uninsured adults, availability of primary care providers, and preventable hospital stays; rates of high school graduation, number of children in poverty, rates of violent crime, access to healthy foods, air pollution levels, and liquor store density.

source=http://www.panhandleparade.com

Calling the purchase of the 50-year-old Duane Reade “a compelling strategic acquisition,” Walgreen /quotes/comstock/13*!wag/quotes/nls/wag (WAG 34.17, +0.09, +0.26%) said it would fund the purchase with cash on hand and hopes to close the deal by the end of the current fiscal year on Aug. 31.
News Hub: Climate Group Fallout

Several companies are quitting an influential lobbying group focusing in on legislation, despite the administratin’s push to use the budget to pass greenhouse gas legistlation. WSJ’s Grainne McCarthy reports in the News Hub.

The company said that the transaction will dilute earnings per share in the first year after closing but would contribute to the bottom line after that, partly with the help of eventual annual cost savings pegged at between $120 million and $130 million.

Duane Reade, founded in 1960, had sales of $1.8 billion last year. Walgreen said it intends to maintain the name — one of New York City’s best-known local retail brands — on the stores after the acquisition.

“By combining the strengths of our two companies, we can improve our position as the most convenient provider of consumer goods and services, and pharmacy, health and wellness services in the country,” said Greg Wasson, chief executive, in announcing the acquisition.

Buying Duane Reade “is consistent with the capital allocation objectives we outlined last fall, which included investing in strategic opportunities that reinforce the company’s core strategies and meet return requirements,” he added.

Shares of Walgreen were up fractionally at $34.24 in morning trading.

William Spain is a MarketWatch staff writer in Chicago.

NEW YORK (MarketWatch) – The dollar reached an eight-month high versus the euro on Friday, following weak data on Europe’s economy and the continued lack of clarity over Greece rescue plans combined with a surprise Chinese reserve-ratio hike.

The greenback pared gains during the session following a report showing an unexpected decline in U.S. consumer confidence.

The dollar index /quotes/comstock/11j!i:dxy0 (DXY 80.32, +0.32, +0.40%) , which tracks the greenback versus six major currencies, rose to 80.361 from 80.016 in late New York trading. It rose to 80.748 earlier, the highest level on a closing basis since June.

The euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.36, -0.01, -0.41%) fell to $1.3609 from $1.3688. It earlier touched $1.3531, the shared currency’s worst level since May.

The dollar rose 0.3% to buy 90.04 Japanese yen.

The euro is headed for its fourth straight weekly loss, falling from $1.367 a week ago.

The dollar index has moved from 80.441 last Friday and it little changed versus the yen on the week.
Lack of details in Greek plan hits euro

European leaders pledge support for Greece in Brussels, but the vague nature of the plan hurts the euro.

“The euro has been taking it from all sides,” said Jane Foley, research director at Forex.com.

The appeal of the U.S. dollar increased slightly after an index from the University of Michigan and Reuters fell to 73.7 in February from 74.4 in January. Analysts had expected the reading to improve.

The dollar had been bolstered earlier by a report that showed U.S. retail sales rose 0.5% in January, more than economists expected and reversing a revised 0.1% decline in December. Excluding autos, sales rose 0.6%. See more on U.S. retail sales.

“Overall, the numbers indicate that U.S. consumers were not as frugal at the end of 2009 as initially thought and are already picking up spending in the beginning of the year,” said Kathy Lien, director of currency research at Global Forex Trading.

The losses for the euro extended as data showed the euro zone expanding at just a 0.1% clip during the fourth quarter, slower than many had anticipated. See euro-zone GDP story.

“At best, the recovery appears to be pointing at sub-trend growth,” said T.J. Marta, chief market strategist at Marta on the Markets. “The risks are to the downside given the austerity budgets in place in Greece and Spain.”

The decline in the euro also came as the People’s Bank of China said it was lifting the ratio of reserves banks must set aside for the second time this year. The announcement was released after the close of financial markets in Shanghai on Friday and on the eve of the week-long Chinese New Year holiday. See more on China’s reserve moves.
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“This is weighing on risk appetite and reversing some of the overnight losses seen in dollar and yen,” Ashraf Laidi, chief market strategist at CMC Markets, wrote in a note.

Indeed, the U.S. currency rose earlier by 0.7% versus the New Zealand dollar. The Australian dollar fell about 1% versus the greenback and 0.6% against the yen.

The euro also declined 0.3% against the yen.

Both the China and European news dented faith in the global economic recovery.

With Greece’s economy contracting by 0.8% during the fourth quarter, traders worried how it will be able to cut its deficit to 3% of GDP by the end of 2012, particularly after Thursday’s gathering of European leaders failed to produce any specifics on how Greece may be helped.

Finance ministers from the euro area are due to meet next week.

Deborah Levine is a MarketWatch reporter, based in New York. Steve Goldstein is MarketWatch’s London bureau chief.

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Has Tom Brady given the boot to the boot?

Hours after being photographed with a walking boot on his right foot as he followed girlfriend Gisele Bundchen into her New York apartment on Monday, other pictures showed the New England Patriots quarterback wearing black shoes — and no boot — when he showed up at a New York hotspot.

The Web site PageSix.com had two photos — credited to INFDaily.com — that showed Brady wearing blue jeans and a black sweater with the black shoes and no boot. In one photo, he was followed by Bundchen as they arrived at the club Butter in New York, the Web site said.

Keep reading here.