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Executives of Lehman Brothers and their accountants at Ernst & Young have been sued by an investment pool, for more than $150m (£102m).

Filed in San Francisco Superior Court, the San Mateo County suit accuses Lehman of making repeated public statements about its financial strength, reporting record profits for the fiscal year 2007 and going as far as to give its executives bonuses, with the help of Ernst & Young, while behind closed doors the situation was far from secure.

Lehman also raised more than $30bn from investors like the San Mateo County Investment Pool based on its statements about its financial health, according to the suit signed by Joseph Cotchett, the lead counsel retained by the County.

“We will aggressively pursue this litigation because we are not going to sit back and let Wall Street lies harm our schools, our transportation system and our communities” - said Adrienne Tissier, president of the Board of Supervisors.

Named in the suit were former Lehman chief executive Richard Fuld Jr., former chief financial officers Christopher O’Meara and Erin Callan, former president Joseph Gregory and some of the directors of Lehman’s auditor, Ernst & Young.

‘The defendants focused their efforts on trying to save their company and their jobs with little or no regard to how their egregious actions harmed those who in good faith invested in Lehman Brothers,’ said Michael Murphy, San Mateo county counsel. “In our view, their actions were blatantly illegal”, - he added.

Ernst & Young refused to comment.