US regulators will vote next week on rules that may make it harder for companies to mask debt after Lehman Brothers Holdings Inc was accused of misleading investors by temporarily moving assets off its books.
Securities and Exchange Commission members will meet on September 17 to consider expanding what firms must disclose about their “short-term borrowing,” the agency said on its Web site yesterday. Commissioners will also vote on whether to issue guidance to help companies assess whether they are adhering to disclosure rules for “liquidity and capital resources,” the SEC said.
SEC Chairman Mary Schapiro in April said the agency would review whether new rules are needed to prevent banks from using accounting maneuvers to reduce borrowing at quarter-end when they have to reveal debt levels to investors. The agency was concerned that companies were boosting debt after quarterly reports, giving investors a misleading impression, she said.
Lehman filed the biggest bankruptcy in history on September 15, 2008, exacerbating a global credit crisis following the collapse of the US mortgage market. Bankruptcy examiner Antonio Values wrote in a March report that New York-based Lehman tried to hide its true financial picture by moving $50 billion of assets off its books and accounting for the transactions as sales.
