DOJ Investigating Conduct of Lehman Brothers and Ex-UBS Executive in ARS Collapse

The DOJ is currently investigating whether Lehman Brothers Holdings defrauded clients and whether a former executive at UBS AG was involved in insider trading related to the collapse off the auction rate securities market, according to the WSJ. The investigations are reportedly are among the first to look at whether individuals committed crimes in the credit crisis.

The US Attorneys Office in Brooklyn, NY is said to be leading the Lehman Brothers investigation and is probing whether individuals there dumped ARS into customer accounts before the market broke down.

Federal prosecutors in Washington, DC are reportedly considering whether “to charge David Shulman, who ran the auction-rate-securities business for Swiss banking giant UBS, with insider trading for selling his own holdings of auction-rate securities ahead of that market’s collapse,” the WSJ reported, citing two people familiar with the matter.

Read the WSJ article