Lehmann Brothers Bankruptcy
Lehmann Brothers Bankruptcy: A Case Study
Abstract:
When the investment bank Lehman Brothers fell on 15 September, 2008, it was the largest bankruptcy ever, and it still is. The bank had assets of $639 billion, which is about as much as the five subsequently largest bankruptcies combined.
This is a case study elaborating the reasons and consequences of this scandal. Introduction:
Lehman Brothers Holdings Inc. used to trade on the NYSE under the symbol LEH as the fourth largest investment bank in the US. It provided global financial services in investment banking, fixed income sales, trading US treasury securities, investment management, private equity, and banking. But on
September 12, 2008 it found itself under financial predicaments when it filed for bankruptcy. With $600 billion in debt, LEH stands as the largest bankruptcy in world history. The company experienced an alienation of most of its clients, drastic losses in its stock, and loss of its assets when it got devaluated by credit rating agencies. This was mainly because Lehman Brothers had been taking excessive risks to the point that it became insolvent. Many argue that letting Lehman Brothers fail was one of the triggers of the financial crisis; the demise of Lehman Brothers accelerated the global financial crisis and sparked debate over ethical issues on Wall Street and in the financial industry in general. The Lehman Brother’s case highlights some of the negative ethical practices that affected the current financial crises in the
United States. Consequently, exploring the Lehman Brothers case will not only give a clear image of how important ethics are in business but also steps to be taken to deal with them on large scale. The financial crisis put the whole world in jeopardy, thus understanding the moral aspects and the ethical implications of the matter helps in understanding how crucial ethics are for the success of any business.
What went wrong at Lehman Brothers
Abstract:
When the investment bank Lehman Brothers fell on 15 September, 2008, it was the largest bankruptcy ever, and it still is. The bank had assets of $639 billion, which is about as much as the five subsequently largest bankruptcies combined.
This is a case study elaborating the reasons and consequences of this scandal. Introduction:
Lehman Brothers Holdings Inc. used to trade on the NYSE under the symbol LEH as the fourth largest investment bank in the US. It provided global financial services in investment banking, fixed income sales, trading US treasury securities, investment management, private equity, and banking. But on
September 12, 2008 it found itself under financial predicaments when it filed for bankruptcy. With $600 billion in debt, LEH stands as the largest bankruptcy in world history. The company experienced an alienation of most of its clients, drastic losses in its stock, and loss of its assets when it got devaluated by credit rating agencies. This was mainly because Lehman Brothers had been taking excessive risks to the point that it became insolvent. Many argue that letting Lehman Brothers fail was one of the triggers of the financial crisis; the demise of Lehman Brothers accelerated the global financial crisis and sparked debate over ethical issues on Wall Street and in the financial industry in general. The Lehman Brother’s case highlights some of the negative ethical practices that affected the current financial crises in the
United States. Consequently, exploring the Lehman Brothers case will not only give a clear image of how important ethics are in business but also steps to be taken to deal with them on large scale. The financial crisis put the whole world in jeopardy, thus understanding the moral aspects and the ethical implications of the matter helps in understanding how crucial ethics are for the success of any business.
What went wrong at Lehman Brothers