The Securities and Exchange Commission has ended their probe of Lehman Brothers without making any enforcement actions. It’s only the latest in a series of investigations that have either turned up empty or resulted in what amounts to a slap on the wrist.

Lawmakers and investors have pressed the agency for more than three years to determine whether Lehman misrepresented its financial health before filing the biggest bankruptcy in U.S. history in September 2008.

Under a heading reading “Activity in Last Four Weeks,” the undated document reads, “The staff has concluded its investigation and determined that charges will likely not be recommended.” [...]

Senior SEC officials have been reluctant to formally close the matter even though investigators found a lack of evidence of wrongdoing, according to people with direct knowledge of the matter. The officials have weighed issuing a public report on their findings that would stop short of an enforcement action while highlighting the firm’s questionable conduct.

My memory of the Valukas report, put out by Anton Valukas, Lehman’s bankruptcy examiner, was that it was incredibly thorough and detailed with plenty of information that would indicate misconduct on the part of executives at Lehman. In particular, Valukas found that Lehman used a series of “Repo 105″ trades to hide their true financial situation. Here’s a good summary of them:

Those sales were known as Repo 105. Near the end of a financial quarter, Lehman’s European unit would “sell” securities to a counterparty and would use the money to pay down other short-term liabilities, so it could report quarterly leverage numbers low enough to satisfy the ratings agencies, and thus investors. A few days after the quarter end, Lehman would repay the cash, plus a hefty interest, and get its securities back [...]

This gave the illusion that Lehman was less leveraged than it actually was. Dozens of rank-and-file employees told the examiner that they were under tremendous pressure to make the Repo 105 deals, especially as Lehman’s financial position got increasingly shaky. Lehman’s own executives described the maneuver as a “gimmick” and, in an email, as “another drug we r on.”

In one quarter, Lehman hid $50 billion in assets using these Repo 105 deals. The SEC obviously didn’t find any of that actionable. But it shows the kind of financial games being played during the crisis to pretend to keep in line with regulatory guidelines while taking on more risk. And it’s hard to argue that this doesn’t count as a misrepresentation to both investors and regulators.

Unless you’re the SEC, in which case you look busy investigating for three years and then quietly drop it.