Investigators with the Securities and Exchange Commission may issue a public rebuke of Lehman Brothers Holdings Inc. and its former executives rather than suing them for actions that led to the company's 2008 failure, three people with direct knowledge of the matter said.

SEC enforcement lawyers, who have struggled for more than two years to find definitive evidence that the New York company and its leaders violated securities laws, are concerned that a legal attack on Lehman's accounting practices would likely fail, the people said, speaking on condition of anonymity because the deliberations are not public.

Instead, the enforcement staff may recommend that the SEC take the rare step of publishing a so-called report of investigation, also known as a 21(a) report. The commission would have to vote on whether to issue a report and it's still possible that the SEC may decide to bring legal claims in court, the people said. The reports, which lay out allegations of misconduct without imposing penalties, have only been issued six times in the past decade.

"The SEC can claim that this is decisive action and that they're on record as to the wrongdoing. It doesn't meet the inevitable resistance that civil action meets — the possibility of failure," said Robert Hillman, a professor at the University of California at Davis.

Lehman, which filed the biggest bankruptcy in U.S. history in 2008, was faulted along with its executives in a report by Anton Valukas, the court-appointed examiner, who said they misled investors with "accounting gimmicks."

Kimberly Macleod, a Lehman spokeswoman, declined to comment. Patricia Hynes, a lawyer at Allen & Overy for Lehman's ex-CEO Richard Fuld, and Robert Cleary, a lawyer at Proskauer Rose for former finance chief Erin Callan, did not respond to emails. Florence Harmon, an SEC spokesman, declined to comment.

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