House panel to investigate Lehman accounting problems

The House Financial Services Committee will hold a hearing into recent revelations that Lehman Brothers, the failed investment bank, hid billions of dollars in debt from the public.

Rep. Mary Jo Kilroy (D-Ohio) requested a hearing into allegations contained in a 2,200-page report from a court-appointed bankruptcy examiner in the Lehman case. Rep. Spencer Bachus (R-Ala.), ranking member on the committee, also had requested a hearing about Lehman.

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"Lehman Brothers played a shell game with their money, leaving the American taxpayer with the bill when the Wall Street firm eventually folded under the weight of its own fraudulent activities," Kilroy said.

Bachus in a letter on Tuesday criticized the record of both the Securities and Exchange Commission (SEC) and Federal Reserve Bank of New York in regulating Lehman prior to its demise.

"The actions of these two regulators represent a grave failure and should be explored at a public hearing," Bachus wrote.