Introduction

The story of Lehman Brothers begins with the struggles for a better life of a 23-year

old Bavarian emigrant, Henry Lehman and it is with the arrival of Richard Fuld, the greedy,

power hungry and the irresponsible, where the story ends. In America, during 2000s a new

market of subprime was booming and high returns could be ripped from it. Lehman couldnt

resist it and soon began to specialize in subprime mortgages combined with a number of

other instruments which aim to mask the risk and boom the returns. On the other hand a

mentality of untouchable as they were too big to fail was constructed. However, the failure

already showed that no one can beat the market. Failure of Lehman Brothers brings out

important lessons to be taught, but firstly one has to understand the reasons for such a failure.

(Latifi, 2013)

General Information

Lehman Brothers Holdings Inc. was a global financial services firm. On September

15, 2008, Lehman Brothers filed for Chapter 11 bankruptcy protection following the massive

exodus of most of its clients, drastic losses in its stock, and devaluation of assets by credit

rating agencies, largely sparked by Lehman's involvement in the subprime mortgage

crisis and subsequent allegations of negligence and malfeasance. With $639 billion in assets

and $619 billion in debt, Lehman's bankruptcy filing was the largest in history, as its assets

far surpassed those of previous bankrupt giants such as WorldCom and Enron. Lehman was

the fourth-largest U.S. investment bank, doing business in investment

banking, equity and fixed-income sales and trading, research, investment

management, private equity, and private banking, at the time of its collapse, with 25,000

employees worldwide.
 Lehman's demise also made it the largest victim of the U.S. subprime mortgage-

induced financial crisis that swept through global financial markets in 2008. Lehman's

collapse was a seminal event that greatly intensified the 2008 crisis and contributed to the

erosion of close to $10 trillion in market capitalization from global equity markets in October

2008, the biggest monthly decline on record at the time. (Dubofsky, 2013)

Mission Statement

We are one firm, defined by our unwavering commitment to our clients, our

shareholders, and each other. Our vision is to build unrivaled partnerships with and value for

our clients, through the knowledge, creativity, and dedication of our people, leading to

superior returns to our shareholders. (O'Neill, 2008)