The Securities and Exchange Commission is reported to have been castigated because of its failure in discerning a spate of accounting errors, at investment bank Lehman Brothers, before it became bankrupt.
The agency has now risen from its deep slumber, promising to exercise better control and regulation on the nation’s largest banks.
The agency has reportedly delivered letters to over 19 banks, in a view to get information about whether they are resorting to any sort of accounting gimmicks to hide their actual scenario, Chairwoman Mary Schapiro posted in front of a congressional panel.
“It’s not clear any action by the SEC could have saved Lehman Brothers, but we are determined to use the lessons of that experience to be more effective”, Schapiro was quoted as saying. “More vigorous oversight and a new approach are essential”, she said.
Presently, the agency is on with its inquiry into Lehman’s use of the accounting move, known as Repo 105 that is used to veil its various Achilles Heels, Schapiro further added.
Lehman’s collapse is deemed to be worst corporate bankruptcy that has been witnessed by the U.S. economy. Its reverberations were so strong that it engulfed all the financial markets across the globe.