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Laurence M. Ball, chairman of the economics department at Johns Hopkins University, has produced the most comprehensive and persuasive argument yet that the Federal Reserve could have saved Lehman from the precipitous and chaotic bankruptcy that occurred that fateful weekend in September 2008, the New York Times reported today. He recently presented the result of four years of research, “The Fed and Lehman Brothers,” to a group of economists gathered in Cambridge, Mass. Prof. Ball takes issue with the established narrative that the Fed was powerless to lend to Lehman in its waning hours: “Fed officials have not been transparent about the Lehman crisis. Their explanations for their actions rest on flawed economic and legal reasoning and dubious factual claims.”

Federal prosecutors are poised to launch one of the largest asset seizures in U.S. history as they step up their investigation into billions of dollars siphoned away from a Malaysian government investment fund, the Wall Street Journal reported today. Authorities are expected to file civil lawsuits today seeking to seize more than $1 billion worth of assets, which are expected to include properties and other assets purchased with money allegedly misappropriated from the Malaysian fund. The Wall Street Journal has reported that people linked to the fund have invested millions of dollars in real estate and businesses in the U.S. Agents from the Federal Bureau of Investigation’s international corruption unit have also been conducting a wide-ranging criminal investigation into people and institutions connected with 1Malaysia Development Bhd., known as 1MDB, a sovereign-wealth fund set up by Prime Minister Najib Razak in 2009 to drive the country’s economy.

Carlyle Group co-founder Bill Conway was in court on this small island last week recounting one of the most bruising episodes in his private-equity firm’s history: the 2008 collapse of mortgage-bond fund Carlyle Capital Corp., the Wall Street Journal reported today. Carlyle Capital Corp. (CCC) borrowed vast sums from banks to buy $23 billion in bonds. When a deteriorating U.S. housing market spooked CCC’s lenders, investors in the fund lost their entire $945 million in capital. Conway was summoned to Guernsey, where the fund was registered a decade ago, to testify in a $1 billion civil lawsuit by CCC’s liquidators. They allege that Conway and six other Carlyle and CCC officials acted recklessly and should have started selling the fund’s assets months before it failed. For six days this month, Conway answered questions from a lawyer of the liquidators about the fund’s business model, governance and funding problems. Among the specific allegations against him: that he refused to have CCC sell assets or restructure as loans dried up in the summer of 2007 because he didn’t want bad publicity from CCC to jeopardize an investment by an Abu Dhabi government fund in Carlyle Group. Conway denies that.

Jason Mudrick, the chief investment officer at Mudrick Capital Management LP, is sending distress signals about the firm’s holdings in unsecured debt of Lightstream Resources Ltd., Bloomberg News reported today. As things stand, those holdings would be almost wiped out by a rescue plan designed to cut debt by $904 million for the Canadian oil producer. The plan pits Mudrick’s $1.3 billion hedge fund against some of the world’s biggest distressed-debt investors at Apollo Global Management LLC and Blackstone Group LP’s GSO Capital, who he said negotiated the plan privately with management to get majority ownership. Holders have also disputed restructurings this year at Cliffs Natural Resources Inc., Vanguard Natural Resources LLC and Chesapeake Energy Corp. “Larger distressed-debt funds will likely continue to be in the driver’s seat when it comes to the negotiation of plans of arrangement that suit their interests, to the detriment of the often smaller, unsecured creditors,” said Kyle Kashuba, a partner focused on financial insolvency and corporate restructuring in the Calgary office of law firm Norton Rose Fulbright.

Republican National Convention delegates approved a platform yesterday that calls for reinstating the Glass-Steagall Act and scaling back the Dodd-Frank financial overhaul, Bloomberg News reported. The Glass-Steagall measure puts presumptive presidential nominee Donald Trump and his party in the company of unlikely allies such as Bernie Sanders, who ran against Democrat Hillary Clinton on a plan that included Glass-Steagall reinstatement, underscoring the blurring of political lines in the 2016 race. The platform also embraces Trump's stance on international trade, saying that trade agreements — such as the Trans-Pacific Partnership negotiated by the Obama administration, though an explicit reference to that deal was removed — should not be rushed.

The roles played by investment banks in billion-dollar buyouts have lately come under fire in the Delaware courts. Now, a complaint arising from the recent $2.2 billion buyout of the ExamWorks Group focuses on a different kind of deal adviser, according to a commentary in the New York Times DealBook blog yesterday. It contends that lawyers at Paul Hastings, a law firm based in Los Angeles, were in ties with management and the investment banks to sell the company at a below-market price, something ExamWorks vigorously denies. ExamWorks is an independent medical examination company founded by Richard E. Perlman and James K. Price. Perlman and Price are experienced financiers, focusing on industries where they can roll up a number of small companies, take the larger enterprise public and then sell out, typically to a private equity firm. This is what happened at ExamWorks, although in this case, the plaintiff, the Daytona Beach Police and Fire Pension Fund, claims that the buyout was tainted by conflicts and a failure of Paul Hastings to run the process appropriately. The fund, a shareholder of ExamWorks, is suing the company’s directors, as well as the private equity firm leading the buyout, Leonard Green & Partners.