50 cents dollar

(from www.wallstreetfolly.com)

Embarrassingly bad due diligence by a supposedly sophisticated investment banking firm?:  As if Lehman Brothers isn’t already up to its eyeballs in problems, now they’re claiming that they were scammed out of $350 million in an elaborately staged swindle. They thought they were ultimately lending cash to a partnership backed by Japanese trading house Marubeni Corp, but instead found that they had lent money to a big fat fraud created by a few Marubeni employees using a series of forged internal documents. Marubeni says they knew nothing about the transaction.  Major oopsie.   Now Lehman is suing Marubeni, which claims that the company isn’t responsible for the losses “accordingly, we have no obligation to pay any of these demands”….

Lehman Brothers Holdings Inc. has gone to court in Tokyo in an effort to recover $350 million it says it was bilked out of through an elaborate scheme in which employees of a big Japanese trading company allegedly used forged documents and an imposter to raise cash.

The purported swindle, which involved the establishment of a partnership to fund the refurbishment of hospitals, allegedly involved two employees of Marubeni Corp., a 150-year-old trading house, according to people familiar with the situation.

The apparent fraud, which could be one of the biggest and boldest in recent corporate history, involved a funding partnership the New York investment bank entered into with a medical consultancy owned by Tokyo pharmaceutical company LTT Bio-Pharma Co. late last year.

Lehman thought the funds it committed to providing to the partnership were backed by Marubeni, based on documents on Marubeni letterhead that bore a Marubeni board member’s seal, which the investment bank later found was forged. At least two meetings to finalize Lehman’s participation in the partnership were held at Marubeni’s headquarters, according to the people familiar with the situation….

Lehman Sues Japan Firm, Claiming $350 Million Fraud - Wall Street Journal

Lehman Brothers file criminal complaint after ‘$350m scam’ - The Times of London

Lehman sues Marubeni for Y35bn - Financial Times