What Ever Happened To Lehman Brothers’ Whistle Blower Matthew Lee?

According to his lawyer, Matthew Lee has had a rough time lately.


Hardly a household name, Matthew Lee, the former Lehman Brothers executive who tried to blow the whistle on questionable accounting practices, was laid off, remains unemployed and recently had his motives questioned by the New York Times star reporter and crisis chronicler Andrew Ross-Sorkin.

Lee declined to comment for this story but his lawyer confirmed that his client has had a rough time lately. “He has been living off of his now depleted 401(k) and is unable to find work,” said attorney Erwin Shustak. “He has two young daughters. It’s been a difficult time.”

In May of 2008, Lee, a then 54-year-old senior VP and 14-year Lehman veteran whose job involved helping to oversee the investment bank’s global balance sheet consolidation activities, penned a letter to senior management. It raised serious red flags over what Lee saw as accounting irregularities that masked Lehman’s true risk exposure. Sent to Lehman CFO Erin Callan and chief risk officer Christopher O’Meara, the explosive missive also accused the firm of making misleading statements to the public and regulators. “The firm has tens of billions of dollar of inventory that it probably cannot buy or sell in any recognized market at the currently recorded current market values,” Lee wrote. “I do not believe the manner in which [Lehman] values that inventory is fully realistic or reasonable.”

His unheeded warnings were discovered and publicized by bankruptcy-court examiner Anton Valukas, who issued his scathing report in early March alleging that Lehman engaged in some serious accounting gimmickry. Days after firing off the letter, Lee was let go.

Not only is Lee unlikely to be confused with Madoff whistleblower Harry Markopolous — basking in movie deals, fame and vindication alongside Michael Lewis’s band of prescient protagonists in The Big Short — he was dealt a reputational blow when Ross-Sorkin suggested in a column, citing unnamed sources, that Lee only blew the whistle after he realized he was going to lose his job. (Sorkin, in turn, was taken to task by Ryan Chittum in a Columbia Journalism Review web posting in which he revealed that neither Lee nor his lawyer had been contacted by Sorkin.) Shustak later conceded to the Wall Street Journal that Lee had been demoted prior to writing the letter, but Shustak stresses to II that “Lee had no knowledge that he was being terminated until after he sent that letter.”


About Lee’s future plans, Shustak says, “Now he wants to go in a different direction. I guess you could say that he’s disillusioned with Wall Street.”

Lee could always end up like Markopolious and secure a book deal. Maybe if he ever gets around to contacting Lee for his side of the story, Sorkin might even recommend a good literary agent.

Richard Blake

Richard Blake

Rich Blake is a New York City-based freelance financial journalist. He currently contributes to Institutional Investor magazine, Reuters HedgeWorld and ABCNews.com, among others.