Lehman report may point way for criminal charges

"It's pretty hard to conceive that prosecutors would not go after them. And those guys are going to point the finger at the chief financial officers, who will point the finger at the CEO," he said.

Dan Richman, a law professor at Columbia University, said Valukas had produced "a thorough and intensive report" that could prove invaluable to prosecutors and civil enforcement agencies like the Securities and Exchange Commission.

"It certainly provides a very major assist to prosecutors trying to understand particularly complex transactions over a long period of time," Richman said.

Several legal experts speculated that New York Attorney General Andrew Cuomo, who has not been shy about going after Wall Street and is widely expected to run for governor, may be the first law enforcement official to jump in. With New York's Martin Act, Cuomo has an especially potent tool at his disposal to combat financial fraud.

The once-dormant law, which was enacted in 1921, was used by New York Attorney General Eliot Spitzer in bringing cases, both civil and criminal, in investigations of Wall Street research, mutual fund market timing and insurance brokers.

Cuomo has deployed the law recently in pursuing a lawsuit against Bank of America Corp and its former chief executive, Kenneth Lewis, and former chief financial officer, Joe Price, accusing them of misleading shareholders about the bank's acquisition of Merrill Lynch & Co.

A spokesman for Cuomo's office did not respond to a request for comment on Friday.

"I think prosecutors are going to have a very difficult time not moving forward with criminal charges," Nowicki, of Boston University, said.

"The reality is that this report, after experts and the media start going through and commenting on it, is going to stir up some level of public outrage that I don't think the SEC or the Department of Justice is going to want to ignore."

(Reporting by Dan Margolies; Editing by Gary Hill)