TODAY   |  December 22, 2010

Ernst & Young charged in Lehman collapse

New York Attorney General Andrew Cuomo has accused Ernst & Young of helping to hide Lehman Brothers Holdings Inc.'s financial problems. NBC’s Lisa Myers reports.

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>>> one of the top accounting firms other thanst and young is -- lisa myers has the latest.

>> reporter: good morning to you, savannah. these civil charges are the first charges of any kind involving the collapse of lehman brothers . they're aimed not at lehman executives but it's auditors who allegedly helped the company hide billions of dollars in liability. so investors wouldn't know just how weak the company was. the images are still vivid. september 2008 .

>> lehman brothers one of the nation's most respected investment banks is nearly history today.

>> reporter: lehman 's collapse helped trigger the financial meltdown and costed investors trillions of dollars. now the attorney general has accused lehman 's auditor of helping -- specifically the civil lawsuit charges that he repeatedly engageded in transactions that took $50 million of debt off the company's balance book. andrew cuomo called it a house of cards business model designed to hide billions in liability in the year before lehman collapsed. william black , a bank regulator during the savings and loan crisis praised the move.

>> somebody finally did something about lehman and about the top tier audit firms that have given clean opinions to every scam in the modern crisis and gotten away with it.

>> the case was brought by a state attorney general and not the federal government .

>> this filing again raises the question of whether or not this federal regulator, the sec has become an old toothless dog laying in front of the fireplace that has lost its bark and bite.

>> reporter: an obvious question, if the auditor is accused of wrong doing, what about the executives who conducted or approved the transactions?

>> i think it's pretty clear that there will be an action brought probably by the sec against some senior executives at lehman .

>> former lehman ceo dick fold says he did not know of these transactions and has done nothing wrong. his lawyer did not respond to a question for comment. fold has kept a low profile but maintains a lavish lifestyle. he still owns an $8 million mansion in greenwich, connecticut and owns a 50 acre compound near sun valley idaho. the ceo says that the company followed -- lehman 's financial statements clearly portrayed lehman as a highly leveraged entity.

>> lisa meyers in our washington newsroom this morning.

>>> it's 7:18, once again here's