Lehman Investigation To Cover Commercial Real Estate Investing

The U.S. attorney's office for New York's Southern District, in Manhattan, is investigating whether Lehman valued its assets at artificially high levels, say two people familiar with the matter. That office has issued subpoenas to individuals that focus on what the firm told investors and other parties about its valuations for approximately $32.6 billion in commercial-real-estate holdings, according to a person familiar with the matter.

Lehman's commercial real-estate portfolio came under review by a number of firms, including Goldman Sachs Group Inc., Credit Suisse Group, Barclays PLC and Bank of America Corp., all of which declined to buy the portfolio. Some executives who looked at the portfolio say they believe the portfolio was being overvalued by Lehman by as much as 35%, as reported in a page-one article in The Wall Street Journal Monday.