Lehman Brothers’ ex-CEO denies accounting gimmick

Lehman Brothers’ former chief executive says he has “no recollection whatsoever” about an accounting maneuver that a bankruptcy examiner says the company used to mask its perilous financial condition.

Richard Fuld, Lehman’s former CEO, said he does not recall seeing any documents related to the so-called Repo 105 accounting gimmick, according to testimony prepared for a House hearing today.

The examiner’s report “distorted the relevant facts” and the accounting complied with standard practices, Fuld said in the prepared remarks.

Last month, the examiner appointed by the bankruptcy court to probe the Lehman debacle found that the firm masked $50 billion in debt by using the Repo 105 accounting maneuver.

Anton Valukas found that Lehman put together complex transactions that allowed the firm to sell “toxic” securities at the end of a quarter. That wiped them off its balance sheet, avoiding the scrutiny of regulators and shareholders. Then the bank quickly repurchased them — hence the term “Repo.”

 

General Motors to repay loan sooner than promised

General Motors Co. will fully repay the $6.7 billion loan portion of its U.S. government aid earlier than its previously promised payback date of June, a person briefed on the plans said Monday.

GM CEO Ed Whitacre will announce details of the repayment during a visit Wednesday to the company’s Fairfax Assembly Plant in Kansas City, Kan., said the person, who did not want to be identified because the announcement has not been made.

The company has received a total of $52 billion in U.S. government aid, with the $6.7 billion considered a loan. The rest would be repaid when the company sells stock to the public, perhaps later this year.

Investors’ concerns ease about Goldman Sachs case

Investors snapped up financial stocks Monday after concerns eased about the government’s case against Goldman Sachs.

The Dow Jones industrial average ended with a gain of 73 points after sliding for much of the day. The advance followed a drop of 126 points Friday after the Securities and Exchange Commission filed civil fraud charges against Goldman Sachs related to mortgage investments.

Analysts said reports that the SEC voted 3-2 along party lines to press its case against Goldman Sachs eased some of investors’ worries. Investors seemed placated by the fact the vote wasn’t unanimous.

Citigroup rose 32 cents, or 7 percent, to $4.88 after the bank said its first-quarter profit improved because of strong investment banking operations. Citi also said its losses from failed loans fell slightly from the previous quarter.

 

Tech bloggers say photos depict next Apple iPhone

Technology bloggers have posted photos of what appears to be the next version of Apple Inc.’s iPhone, and if the images are real, the device will have a clearer display, longer battery life and a camera in the front that could be used for video conferencing.

AOL Inc.’s Engadget blog published photos Saturday that were taken by an unknown person of an iPhone-esque device.

On Monday, Gawker Media Inc.’s Gizmodo, a competing gadget blog, had the phone in its possession and was posting photos and videos of its own. Nick Denton, founder of Gawker Media, said the company paid $5,000 for the phone.

Both websites said the iPhone had been lost in a bar. Gizmodo called the device “the real thing” and offered detailed evidence to support the assertion.