The head of the U.S. Securities and Exchange Commission confirmed Wednesday the agency is investigating several companies' actions in the run-up to the financial crisis of 2008. 

SEC Chairman Mary Schapiro said "it would be safe to assume" that the agency is looking very closely at the conduct of a number of firms during this time. She did not name the companies. 


Journalists surround a man as he arrives at the Lehman Brothers headquarters in New York on Sept. 15, 2008, the day when one of the most storied firms on Wall Street collapsed. ((Mary Altaffer/Associated Press))

Schapiro was testifying at a House Appropriations subcommittee weighing the agency's request for about $1.3 billion for the budget year starting Oct. 1, a 12 per cent increase from the current year. 

Lawmakers want to know if the sort of accounting gimmick recently uncovered that was used by the collapsed investment firm Lehman Brothers to mask billions in debt was widely deployed on Wall Street.

The SEC's review of the Lehman Brothers disaster "has taken us down a path where we're looking broadly," Schapiro told reporters following her testimony. 

The implosion of Lehman Brothers Holdings Inc. into the biggest bankruptcy in U.S. history in September 2008 precipitated the financial meltdown that plunged the economy into the most severe recession since the 1930s. 

After saddling itself with tens of billions worth of troubled assets that couldn't easily be sold, Lehman masked $50 billion in debt and its perilous financial condition by using the so-called Repo 105 accounting gimmick, an examiner appointed by the bankruptcy court said in an extensive report issued last week.

SEC criticized over Lehman supervision 

"This cannot be tolerated again," said Rep. Jose Serrano, D-N.Y., chairman of the appropriations panel. 

The Lehman collapse "could be an even greater tragedy" than the multibillion-dollar swindle by money manager Bernard Madoff, Serrano suggested, because it ignited a chain of events that threw millions of Americans out of work. 

Questions have been raised about the SEC and Federal Reserve's supervision of Lehman in the months before its collapse. 

"The culture of the agency is changing. It doesn't happen overnight," Schapiro told the lawmakers. In the meltdown's wake, the SEC and the Justice Department launched wide-ranging investigations of companies across the financial services industry, believed to include insurer American International Group Inc. and mortgage giants Fannie Mae and Freddie Mac as well as Lehman.

A year and a half after the financial crisis struck, charges haven't yet come in most of the probes. 

The Lehman autopsy issued last week by bankruptcy examiner Anton Valukas could serve as a valuable roadmap to the two agencies in their investigations, experts say.

Schapiro said Wednesday the report raised "some very interesting points" and would be "helpful."