Florida Got Lehman Help Before Run on School's Funds

Discussion in 'Wall St. News' started by THE-BEAKER, Dec 19, 2007.

  1. a man holds up a store and robs it for a few hundred dollars

    sentence probably 10 -20 years.

    these whores at the us investment banks wont even do one hour in a police cell and they are robbing peope blind.

    Dec. 18 (Bloomberg) -- It was the first day of November and Coleman Stipanovich's world was coming undone. Florida school districts and towns had begun pulling their cash out of the $26 billion money market fund he supervised, after they learned it held subprime-tainted debt.

    Stipanovich, who earned $180,214 in 2006 as executive director of the State Board of Administration, was in New York in confidential meetings with Lehman Brothers Holdings Inc., the largest U.S. underwriter of mortgage-backed bonds. Lehman was proposing ways to help the state manage the risk of its debt investments, according to a letter the bank sent to Stipanovich after the meeting.

    What Stipanovich, 58, hadn't told his boss, Florida Chief Financial Officer Alex Sink, was that Lehman Brothers was the same firm that had sold the state fund $842 million of mortgage- backed debt in July and August. Those securities defaulted within four months, and totaled more failing debt than any other bank sold the state, Florida records show. ``At the time, I never knew it was Lehman Brothers that actually sold us these investments,'' Sink says.

    Sink also was unaware that former Florida Governor Jeb Bush, who incorporated Jeb Bush & Associates in February 2007, a month after completing his second term, had been hired as a consultant to Lehman Brothers in June. Bush is the brother of President George W. Bush.

    `Do Something Quickly'

    In November, school districts and local agencies that kept their cash in the state pool rushed to withdraw $12 billion, or 46 percent, of the money in the fund. On Nov. 29, the state froze the fund to stop all withdrawals. ``If we don't do something quickly, we're not going to have an investment pool,'' Stipanovich told the board that day.

    Until November, the Florida pool was the largest public money market fund in the U.S. It held cash for about 1,000 school districts, towns and local agencies in Florida.

    Stipanovich resigned on Dec. 4. He declined to comment.

    Florida CFO Sink is riled up about more than Stipanovich. She says JPMorgan Chase & Co. and Lehman Brothers were offloading tainted debt on Florida and other states at a time when those assets were plummeting in value.

    The subprime meltdown made front-page news in June, when Bear Stearns Cos. disclosed that two of its hedge funds were collapsing because they were stuffed with subprime collateral. During the next two months, Wall Street firms were quietly peddling mortgage-backed securities to the states.

    And the states, eager for higher returns, were buying them.

    `It Looks Questionable'

    ``Lehman and the other big players in the market decided they didn't like this stuff in their own accounts,'' Sink says. ``Where did they drop it and who did they dump it to? It looks questionable to me.''

    full story:

  2. ROFLMAO!!!

    Ah yes the good ol' Jeb Bush turns up again. Bit ya right on the arse!....you'll probably all vote republican again anyway!

    You are getting what you all deserve!