A New Jersey state senator yesterday asked Lehman Brothers to explain how it determined allocations for a 1992 Housing and Mortgage Finance Agency issue, and why one firm that reportedly sold no bonds was given $100,000.
Sen. Robert E. Littell, R-Sussex, sent a letter to R. Thornton Lurie, a senior vice president at Lehman, asking for the explanations.
Recent press accounts have noted that Cypress Securities sold no bonds but received $100,000 in fees on the $278 million deal.
On Tuesday, state Treasurer Samuel Crane told Littell that Lehman suggested the use of a group net process to ensure that minority- and women-owned firms earned a piece of the profits from the sale.
Littell asked Lehman to confirm that the treasurer's account was accurate and to provide an explanation for the allocations.
"What did one company in the selling group, namely Cypress Securities, do to deserve five times as much in fees as any other member of the selling group?" Littell's letter asks.
The senator stressed that he is not suggesting that there was anything "illegal or unethical" about the allocations.
"This letter should not be interpreted to suggest that I think your company, or anyone else for that matter, has behaved improperly," Littell said. "Rather, I am simply trying to find out how taxpayer money was spent and who made the decision."
Lehman officials were not available for comment late yesterday.