This is 'new' news, in addition to that announced this morning. Things are moving quickly. Not good for Tricky Dicky Fuld. Congress wants its pound of flesh, baby. http://www.bloomberg.com/apps/news?pid=20601087&sid=aqR6ugyYX1tI&refer=home Lehman Is Focus of Three U.S. Grand Jury Probes; 12 Subpoenas By Linda Sandler and Christopher Scinta Oct. 17 (Bloomberg) -- Lehman Brothers Holdings Inc., which last month filed the largest bankruptcy in history, is the subject of three federal criminal probes and at least 12 subpoenas, according to a lawyer for the failed bank. ``We are facing three grand jury investigations,'' said lead Lehman bankruptcy lawyer Harvey Miller yesterday in Manhattan federal court. The probes, launched by the New York U.S. attorneys in Brooklyn and Manhattan as well as in Newark, New Jersey, are focusing in part on Lehman's role in the $330 billion auction rate securities market and possible crimes associated with the New York-based bank's $6 billion June stock issue, according to a person familiar with the case. The New York Post reported today that Lehman Chief Executive Officer Richard Fuld is among the 12 subpoenaed, without saying where it got the information. Miller declined to immediately comment on whether Fuld was among those subpoenaed. Investigators have subpoenaed Ernst & Young LLP, Lehman's auditor; U.K.-based bank Barclays Plc, which bought Lehman's North American brokerage; and the New Jersey Division of Investments, which runs a pension fund that lost $115.6 million on a $180 million investment in the June stock sale, according to people familiar with the case. It's not clear whether these subpoenas are part of the 12 noted by Miller. Yusill Scribner, a spokeswoman for U.S. Attorney Michael Garcia in Manhattan, declined to comment. Fuld's lawyer, Patricia Hynes of London-based Allen & Overy, didn't immediately return a call or e-mail seeking comment. Filed For Bankruptcy Lehman sought bankruptcy protection on Sept. 15 with debt of $613 billion. Its demise helped accelerate a global credit crisis that wiped out $30 trillion of equity value in the past year. Triggered by bankruptcies or stock losses linked to the financial collapse, the U.S. has begun investigations of mortgage lending, securitization and failed banks including Lehman. Nationally, the FBI is looking into 26 firms, including American International Group Inc., a senior law-enforcement official said. Garcia, along with Brooklyn U.S. Attorney Benton Campbell, and Newark, New Jersey U.S. Attorney Christopher Christie, have increased their resources to prepare for possible prosecutions associated with the credit crisis and subsequent bank failures. Christie has subpoenaed documents to determine whether Lehman failed to fully disclose its eroding financial condition at the time of the $6 billion stock offering, according to people familiar with the matter. Opened Inquiries Campbell has opened inquiries into whether Lehman executives misled investors about the firm's financial health and whether Zurich-based UBS AG lied to investors about securities backed by subprime mortgages, according to a person familiar with the case. Also subpoenaed by federal prosecutors were Putnam Investments LLC, the Boston-based mutual fund firm that oversees about $163 billion and bought Lehman bonds and shares; New York- based fund manager BlackRock Inc., a Lehman creditor; AIG, once the world's largest insurer; and C.V. Starr & Co., which is run by ex-AIG CEO Maurice Greenberg, according to the people. The grand jury probes follow not only the implosion of Lehman, but the collapse of Bear Stearns Cos. earlier this year, the U.S. government takeover of Fannie Mae and Freddie Mac and the rescue of New York-based AIG. On the issue of auction rate securities, the grand juries may be exploring whether Lehman misled investors about the viability of the securities. The market collapsed in February after demand for the debt dried up. Banks paid to manage bidding on the debt abandoned the market and stopped acting as buyers of last resort. That caused rates to rise to as high as 20 percent. Credit Suisse Last month, Brooklyn prosecutors charged two former Credit Suisse Group Inc. traders with fraudulently selling corporate clients more than $1 billion of auction-rate securities linked to subprime mortgages, which they claimed were backed by U.S. guaranteed student loans. Interest rates on auction-rate debt are set through periodic bidding. When there aren't enough prospective purchasers, the securities reset based on a formula or revert to a rate specified at the time the securities were initially sold. The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).