The firm's examiner, Anton R. Valukas, issued a report in 2010 castigating senior management for shifting up to $50 billion off the balance sheet through the so-called Repo 105 transactions.
RealFacts, a real estate analysis firm, told the Examiner that a new wave of San Francisco residents who work for technology giants and start-ups seemed to be responsible for the rise in apartment rental costs.
Jacob Frenkel, a former SEC enforcement lawyer now at the Washington law firm Shulman Rogers, says the examiner's language was careful: "What I found striking is that even when Valukas's language was tough, it didn't venture into the arena of fraud.
The hearing examined the bankruptcy examiner's report that said the firm masked $50 billion in debt.
In January 2009, Anton R. Valukas, the firm's chairman, was appointed examiner in the bankruptcy by James M. Peck, the judge overseeing the case.
"It's certainly not helpful to any of them," Michael J. Missal, a partner at the law firm K&L Gates and the examiner in the bankruptcy case of New Century Financial, said of some individuals accused of impropriety in the report.
Five of the ten tests required that the examiner kept a firm hold against the foundation of those parts of the participant's body that were not supposed to move during the test.
When multiple examiners mark each firm's performance against others on all manner of parameters, potential weaknesses become easier to detect.
The SEC sent examiners to the firm twice, including an enforcement team last year, but came up with nothing.
He said the problems that the states uncovered were not representative of the firm's overall performance because examiners looked only at "contentious" closed cases.
Different examiners review the same firm in different periods, which allows me to test whether particular examiners have a systematic effect on error detection rates.
