The House Financial Services Committee plans to probe the regulatory failures that led up to the collapse of Lehman Brothers after a bankruptcy examiner released a damning report last week on the investment banks accounting manipulations.
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At a hearing Wednesday of the House Appropriations Subcommittee on Financial Services, SEC Chairman Mary Schapiro admitted that her agencys oversight of Lehman had been terribly flawed in design and execution.
One member of the committee blasted the regulatory failures. Either the SEC and the New York Federal Reserve failed to discover the ongoing accounting fraud at Lehman, or they turned a blind eye, said Spencer Bachus, R-Ala., according to
Bachus and another representative on the Financial Services Committee, Mary Kilroy, D-Ohio, requested the committee to hold a separate hearing on the bankruptcy examiners report on Lehman. Bachus wants to hear testimony from Treasury Secretary Timothy Geithner, the former head of the New York Federal Reserve; as well former Lehman CEO Richard Fuld, and former SEC Chairman Christopher Cox. House Financial Services Committee Chairman Barney Frank, D-Mass., has agreed to hold the hearing.