In the most sweeping allegations against an accounting firm in nearly a decade, New York's attorney general is accusing accounting giant Ernst & Young of helping Lehman Brothers disguise its financial condition for more than seven years, while collecting more than $150m in fees from the firm.

The two New York companies worked together from 2001 until Lehman's 2008 collapse. The lawsuit, led by New York Attorney General Andrew Cuomo, alleges that the firms engaged in practices to temporarily erase as much as $50bn in Lehman assets. This often occurred near the end of a quarter, allegedly making the company look much healthier than it was.