In 1898, Émile Zola exposed a military conspiracy of sorts in a letter addressed to the French president which was published on the front page of the Parisian newspaper, L’AuroreJ’accuse, the title of the letter, has come to symbolize the expression of outrage against abuses by those in power.

The court appointed Examiner of Lehman Brothers, which sought Chapter 11 bankruptcy protection on September 15, 2008, has issued his scathing, 4,105 page report (including the appendices). Today, the phrase J’accuse should be aimed at Dick Fuld and Lehman Brothers. The Financial Times has reported that credible evidence exists “…that top executives, including the former chief Dick Fuld, approved misleading financial statements and used an ‘accounting gimmick’ to flatter results” (Lehman report lays wide blame for failure, March 12, 2010). In the words of Anton Valukas, the bankruptcy court’s Examiner…

Lehman’s failure to disclose the use of an accounting device to significantly and temporarily lower leverage, at the same time that it affirmatively represented those “low” leverage numbers to investors as positive news, created a misleading portrayal of Lehman’s true financial health. Colorable claims exist against the senior officers who were responsible for balance sheet management and financial disclosure, who signed and certified Lehman’s financial statements and who failed to disclose Lehman’s use and extent of Repo 105 transactions to manage its balance sheet…Lehman’s own accounting personnel described Repo 105 transactions as an “accounting gimmick” and a “lazy way of managing the balance sheet as opposed to legitimately meeting balance sheet targets at quarter end.”

Repo 105 was the phrase used internally by Lehman Brothers to describe their chicanery. Taking a play right out of the Enron book, Repo 105 transactions were accounted for as sales rather than financing transactions. The Examiner explains that a “colorable claim” has been defined by the Second Circuit Court of Appeals as one “that on appropriate proof would support a recovery.” In other words, grounds exist for prosecuting Lehman executives.

Does Dick Fuld end up pulling a Kenneth Lay by joining the “choir invisible” to avoid serving jail time (Enron CEO Ken Lay’s timely heart attack kept him out of prison)? Although perhaps things are not looking up for Mr. Fuld. After Hamlet has killed Polonius, the King asks “where is Polonius?” Hamlet responds…

In heaven. Send thither to see. If your messenger find him not there, seek him in the other place yourself.