NY suit against Ernst over Lehman takes detour

Found this article buried deep within Reuter's website.  It outlines the lawsuite against Ernst and Young led by several pension funds over audits performed by Ernst and Young of Lehman Brothers.  The article goes on to explain how Ernst contends throughout the lawsuit that the firm acted properly and that Lehman's accounting complied with national standards.  The lawsuit claims that Lehman used "Repo 105" to appear less risky.  A "Repo 105" is a short-term loan classified as a sale.  The cash is used to pay down debt which lowered the leverage of the firm.  Later, the firm would repay the loan or give equivalent securities assets.  The firm believed this to be legal since the firm would hand over equivalent securities and not the original ones.  The results of this maneuver is that Lehman was able "window dress" to the tune of over $28B in 2008 just before the firm folded.The legal firm who handled these transactions contends that they are indeed legal.  But how ethical is it?  How is it that Ernst and Young tested these transactions and still gave an unqualified opinion? 
http://www.reuters.com/article/2011/02/23/ernstyoung-lawsuit-idUSN226767820110223?feedType=RSS&feedName=rbssFinancialServicesAndRealEstateNews&rpc=43
http://dealbook.nytimes.com/2010/03/12/the-british-origins-of-lehmans-accounting-gimmick/