N.Y.C. Sticks With Lehman for Tax-Lien Deal

Lehman Brothers will lead manage New York City's second tax-lien securitization next month, despite the legal problems of one of the firm's executives, according to a city finance official.

Martin Harding, a Lehman managing director and co-head of asset-backed securities, last month pleaded guilty to tax fraud and agreed to pay $220,000 in back taxes and penalties to the city.

The Wall Street Journal recently reported that the banker's legal problems had prompted the city to review its expected hiring of Lehman for the asset-backed transaction.

The review failed to convince the city's Finance Department that the firm should be pulled off the transaction, the city official said.

A Lehman spokesman said the firm had not heard of the city's decision to keep them on the deal.

Meanwhile, a spokesman for the city Finance Department said: "Nothing has changed. We were never considering pulling Lehman from the deal."

New York City is likely to sell between $50 million and $100 million of securities backed by tax liens in mid-May, its second such sale in recent years. Last year, the city securitized $215 million of liens.

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