No, it is not the the juniors we are speaking of melting away this time but the SEC on Wall Street. We all knew jail time never applied to Wall Street but at least a few lawsuits may have had a chance in an effort to recoupe one's "lost" money. But alas, not a penny shall be returned although a nasty letter might be forthcoming.

Joke of jokes - VHF

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Lehman May Never Face Court Reckoning as SEC Enforcers Lean Toward Rebuke

Joshua Gallu - Bloomberg News

June 3, 2011

U.S. Securities and Exchange Commission investigators may issue a public rebuke of Lehman Brothers Holdings Inc. (LEHMQ) and its former executives instead of suing them for actions that led to the firm’s 2008 failure, three people with direct knowledge of the matter said.

SEC enforcement lawyers, who have struggled for more than two years to find definitive evidence that the company and its leaders violated securities laws, are concerned that a legal attack on Lehman’s accounting practices would likely fail, the people said, speaking on condition of anonymity because the deliberations aren’t public.

Instead, the enforcement staff may recommend that the agency take the rare step of publishing a so-called report of investigation, also known as a 21(a) report. The commission would have to vote on whether to issue a report and it’s still possible that the SEC may decide to bring legal claims in court, the people said. The 21(a) reports, which lay out allegations of misconduct without imposing penalties, have only been issued six times in the past decade, according to the SEC’s website.

“The SEC can claim that this is decisive action and that they’re on record as to the wrongdoing. It doesn’t meet the inevitable resistance that civil action meets -- the possibility of failure,” said Robert Hillman, a professor at the University of California, Davis, School of Law.

Kimberly Macleod, a spokesman for Lehman, declined to comment. Patricia Hynes, an attorney at Allen & Overy LLP for Lehman’s ex-chief executive officer Richard Fuld, and Robert Cleary, a lawyer at Proskauer Rose LLP for former finance chief Erin Callan, didn’t respond to e-mails. Florence Harmon, an SEC spokesman, declined to comment.

Valukas Report

Lehman, which filed the biggest bankruptcy in U.S. history in September 2008, was faulted along with its former executives in a report by Anton Valukas, the court-appointed examiner, who said they misled investors with “accounting gimmicks.” Valukas alleged that Lehman used the technique, known as Repo 105s, to hide billions of dollars in assets and artificially reduce the firm’s leverage. The actions may not have violated accounting rules, making it difficult for the SEC to pursue fraud claims.

If the SEC determines it can’t bring a case, airing its findings may be the best option for fending off criticism from lawmakers and investors who say the agency hasn’t been aggressive in pursuing wrongdoing that fueled the financial crisis, Hillman said.

James Cox, a securities law professor at Duke University School of Law, said it would be “disappointing” if the SEC didn’t bring fraud charges against Lehman and its executives.

‘Least Harmful’

The rebuke is “about the least harmful sanction anybody could get,” Cox said.