UK Watchdog Clears E&Y Over Lehman Audits

Law360, New York (June 22, 2012, 2:36 PM EDT) -- A British audit watchdog said Friday that it would not seek sanctions against Ernst & Young LLP over the company’s approval of a controversial Lehman Brothers Holdings Inc. accounting trick that hid problems at the investment firm before its 2008 collapse.

The Financial Reporting Council said its Accountancy and Actuarial Discipline Board had closed a two-year probe without finding any wrongdoing regarding E&Y’s audits of Lehman’s British operations.

The investigation, spearheaded by Gareth Rees, the AADB's executive counsel, focused on whether the audit firm improperly signed...
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