Ernst & Young's Response to New York Attorney General's Complaint

NEW YORK, December 21, 2010 - We intend to vigorously defend against the civil claims alleged by the
New York Attorney General.

There is no factual or legal basis for a claim to be brought against an
auditor in this context where the accounting for the underlying transaction
is in accordance with the Generally Accepted Accounting Principles (GAAP).
Lehman's audited financial statements clearly portrayed Lehman as a highly
leveraged entity operating in a risky and volatile industry.

Lehman's bankruptcy occurred in the midst of a global financial crisis
triggered by dramatic increases in mortgage defaults, associated losses in
mortgage and real estate portfolios, and a severe tightening of liquidity.
Lehman's bankruptcy was preceded and followed by other bankruptcies,
distressed mergers, restructurings, and government bailouts of all of the
other major investment banks, as well as other major financial institutions.
In short, Lehman's bankruptcy was not caused by any accounting issues.

What we have here is a significant expansion of the Martin Act. Although
the Martin Act is almost 90 years old, we believe this is the first time that
an Attorney General is attempting to use this law to assert claims against an
accounting firm, rather than the company that took the alleged actions.

We look forward to presenting the facts in a court of law.

Charles Perkins, +1-212-773-2418, or +1-917-774-9311, charlie.perkins at ey.com