Providing a bit of color to Lehman collapse

The coroner's report on the Lehman collapse, introduced in the last post, will be blogger fodder for days, weeks and years to come. The MarketBeat blog leads with this snippet, too:

The business decisions that brought Lehman to its crisis of confidence may have been in error but the decision not to disclose the effects of those judgments does give rise to colorable claims against the senior officers who oversaw and certified misleading financial statements.

Business decisions are matters of judgment, good or bad, and are protected from hindsight second-guessing, be they bad, by the Business Judgment Rule.

Disclosure obligations, however, do not get as much deferential treatment. If something is material, it must be disclosed.

The coroner is saying there are arguable (colorable) grounds for bringing a legal claim for nondisclosure, but not bad decisions.