please tell us whether you have offset securities owned (long positions) with securities sold, but not yet purchased (short positions), along with any basis for your presentation policy and the related gross amounts that are offset. Finally, if you accounted for repurchase agreements, securities lending transactions, or other transactions involving the transfer of financial assets with an obligation to repurchase the transferred assets as sales and did not provide disclosure of those transactions in your
Management's Discussion and Analysis, please advise us of the basis for your conclusion that disclosure was not necessary and describe the process you undertook to reach that conclusion.
We refer you to paragraphs (a)(l) and (a)(4) of Item 303 of Regulation S-K.
As noted above, we seek to better understand the basis for your decisions and your disclosure. Please provide us with a written response to these questions within ten business days from the date of this letter or tell us when you will respond.
Note, this letter simply asks the CFOs of firms to disclose now. My hope is a follow up with real random audits.
“There are no secrets among Wall Street firms,” said Robert Willens, a former Lehman executive who teaches at Columbia Business School in New York. “If one firm was using the technique, it’s clear that other firms were aware of it and would have used it if they needed to.”