History Of Lehman Brothers By Henry Lehman

History Of Lehman Brothers By Henry Lehman
History of Lehman Brothers Henry Lehman in Montgomery, Alabama established Lehman Brothers in 1844. The company started out as a grocery
store and was changed to Lehman Brothers in 1850 after Henry's two brothers; Emanuel and Mayer linked with him in the business. Soon after,
Lehman Brothers developed into a brokerage company distributing cotton. It opened offices in New York in 1858 and this gave the firm a stronger
presence in the commodities trading, as well as it gave it a foothold in the financial community. During the construction of the railway, Lehman
Brothers merged with Kuhn, Loeb & Co and became the primary financial advisors and underwriters to the railroad industry. The company began
financing emerging businesses such as airlines, oil and electric companies. Over its long existence, American Express acquired the company, but
Lehman later broke off and started operating as an independent company until the day of its collapse (Swedberg, 2010). Lehman Brothers was a
company in the United States that operated in the financial market before the financial crisis that occurred in the year 2008. The company was listed
in the New York Stock Exchange and its securities were publicly traded. For many years, the company was performing well. However, a failure to
manage risks appropriately led to the collapse of the company. On September 15, 2008, Lehman Brothers, which was the fourth biggest investment
bank in the U.S, filed for Chapter 11 bankruptcy protection. At the
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The Bankruptcy of Lehman Brothers
THE BANKRUPTCY OF LEHMAN BROTHERS
1
The Bankruptcy of Lehman Brothers: Causes of Failure & Recommendations Going Forward
Amirsaleh Azadinamin
Doctorate of Finance Candidate
March 6, 2012
Electronic copy available at: http://ssrn.com/abstract=2016892
THE BANKRUPTCY OF LEHMAN BROTHERS Abstract This paper looks at the failure of Lehman Brothers as the biggest bankruptcy case in the
US history and the events that followed. The first part of the paper reviews factors that led to the failure and consequently the bankruptcy event. Some
of the causes leading to the crisis, namely the market for Credit Default Swaps (CDOs), misrepresentation of financial statement, complex structure of
the company, low standards, and unethical ... Show more content on Helpwriting.net ...
This will also be discussed throughout the paper.
THE BANKRUPTCY OF LEHMAN BROTHERS Causes of the Failure There is no single cause that led to the failure of Lehman Brothers. There
were numerous causes and agents that led to the disaster, including greedy Wall Street traders, the debt load of American households, the Fed's action,
rating agencies, and last but not least, the
4
deregulation (Morin and Maux, 2011). These factors were responsible for the crisis of credit and not solely the failure of Lehman Brothers. Still, the

market of Credit Default Swaps was one of the biggest factors dedicating to the catastrophe, if not the biggest one as Lehman was heavily involved in
that market. In explaining the sub–prime market, Morin and Maux (2011) explain that sub–prime loans "refer to inferior quality (sub) real estate loans
whose higher risk of payment default is countered by the bank with a higher interest rate. These mortgage loans, granted at variable
rates, were extended to American households with modest incomes" (p. 41). Morin and Maux (2011) also discuss Lehman's involvement in that
particular market as well as how Lehman caused erosion in that market at the same time: The bank is accused of having sold Collateralized Debt
Obligations (CDOs) to its clients and taking short positions that effectively eroded the value of these

The History Of Lehman Brothers
The History of Lehman Brothers
Lehman Brothers was founded by Henry Lehman, and his brothers, Emanuel and Mayer a German immigrant in Montgomery, Alabama in 1850.
Lehman Brothers gained there banking experience by helping to intermediate funding for the emerging group of retail, industrial, and transportation
giants that were founded in the early 1900's. Lehman brothers gained popularity and became a well–known investment bank under Robert Lehman. It
was during this time that Lehman Brothers were gaining recognition not only within US and also Internationally as Lehman brothers had started to join
hands with leading companies in underwriting securities offerings, giving financial advice and helping me mergers acquisitions and takeovers.
Under the leadership of Peterson, Lehman brothers saw huge profits and gained recognition worldwide and had developed offices internationally
through acquisitions. They were able to operate in three main areas of finance which were investment banking, capital markets and client services.
Lehman faced serious problems during the 1980 recession when internal conflict broke out between the investment bankers and traders. Lehman
brothers were financially sound and generated healthy profits, the trading partners only received a small portion of the profits which they thought was
unfair towards them. Lewis L. Glucksman, a 20–year Lehman veteran and highly successful trader with a straightforward, but engaging, style that some
bankers thought

Lehman Brothers : Financial Failure
Lehman Brothers' Bankruptcy
The history of the Lehman Brothers' is prestigious and long. America's wealth owed its beginning from the Lehman Brothers. Many companies from
the US such as the Campbell Soup Company, and American Airlines, among others, obtained a greater level of financing from the Lehman Brothers.
The Lehman Brothers had become one of the biggest investment banks on Wall Street. In 2008, the Lehman Brothers filed the chapter 11 bankruptcy,
after which its attempts to find a buyer seemed unsuccessful.
Assess the factors that contributed to the financial failure of the firm, indicating how management failed to manage the risk related to each factor.
A company can fail due to a number of reasons. However, the Lehman Brothers ... Show more content on Helpwriting.net ...
The warnings of managing directors and talented researchers were not put into consideration by these leaders.
The Board of Directors
As noted in the above context, the board of directors followed instructions from the top. They did what Dick Fuld told them even though it was not
appropriate. The company was failing in its operations even with availability of the Risk Management Department. The board of directors knew the
irrational nature of the markets but was ignored by Dick Fuld. This reflects the lack of corporate governance in reference with the operational risks
that were evident in Lehman. In addition, Dick Fuld was stopped at noting in his efforts to keep the stock price high. The duty of the Lehman's board
was to sign off the decisions that were made by the CEO. The CEO and the chairman were one in the same. Fuld chaired majority of the committees
and his enabled his preferences to be considered.
The Management Team
Joseph Gregory was part of Lehman and the second in command after the CEO. He had worked with this company for 34 years. He was noted to be a
yes– man. This means that he did want the CEO said even if it was not fit for the company. Gregory had passion for minority issues compared with
the corporate issues. He and the CEO never cared about the company even when the company was reporting losses and the fall in stock. It is noted that
Gregory was later removed from the company and

The Worst Recession Of The United States
At the end of the 20th century, it was clear that the United States national economy was on a incline. The U.S began winning the worldwide arms
race, holding 50% of the world weapons stockpile (Taylor 10). Capitalism, the main trademark of the United States economy, spread like a wildfire
across the majority of the world (Taylor 10). To the uneducated ear, news like this sounds great; theUnited States is slowly taking over the world.
However, this insane growth was actually poising the U.S. for an extreme downfall in the coming years of the early 21st century. The major downfall
would come to be known as the worst recession in our history since the infamous Great Depression. While there are several speculated causes to the
recession of 2007, one cause that stands out is the housing bubble burst. "As the housing bubble burst and trillions of dollars ' worth of toxic mortgages
began to go bad in 2007, fear spread through the massive firms that form the heart of Wall Street ("Meltdown")". The first repercussions of the housing
bubble bursting were the floating rumors about the investment bank, Bear Stearns. The rumors of the bank 's imminent bankruptcy were so abundant,
that they became a self fulfilling prophecy ("Meltdown"). In an attempt to save the bank, Federal Reserve Chairman Ben Bernanke created a deal with
JPMorgan ("Meltdown"). This deal stated that "the federal government would use $30 billion to cover Bear Stearns ' questionable assets tied to toxic
mortgages

A Colossal Failure of Common Sense
1.Introduction
A Colossal Failure of Common Sense was one of many books to be published in the aftermath of the Financial Crisis of 2007. After seeing the
global economy stall in the face of massive losses in word financial markets, many Americans sought to better understand the crisis and its causes.
This book, written from the perspective of a financial market insider, provides a glimpse into the world of global finance and also seeks to explain how
the players in this world were involved in the crisis. In the words of the author Lawrence McDonald, "My objective in writing A Colossal Failure of
Common Sense was twofold. First, to provide ... a close–up, inside view of how markets really work.....And, second, to give... as crystal clear an
explanation as possible about the real reasons why the legendary Lehman Brothers met with such a swift end"1. By writing about his personal
experience at Lehman Brothers and recounting stories from within the famous investment banking firm, Mr. McDonald largely succeeds at his first
goal. However, the elements of personal biography and the chronological order of the book make it difficult for the reader to fully appreciate all of
the varied causes of the financial crash. I believe that the main value of reading this book is in understanding these causes, with Lehman Brothers
acting as a microcosm of the greater financial universe. As such, in this review I have isolated elements from Mr. McDonald's book which highlight
how the crisis

The Downfall Of The Lehman Brothers
Part–A
On September 15, 2008, the infamous investment bank Lehman Brothers was forced to file for Chapter 11 bankruptcy by the federal court. The firm
was entangled in risky business that ultimately led to its demise because they did not take reasonable care to avoid acts that were foreseeably damaging
to the United States economy.
Established in the United States, Henry Lehman and his brothers, Mayer and Emanuel, formed a partnership to start a general merchandising business
together naming it Lehman Brothers. Soon after its founding, the Lehman Brothers marked their evolution by turning into a global financial service
firm. The firm grew to be a major player in the financial history of the country, rapidly prospering to be the fourth–largest modern investment and
brokerage bank corporation. The Lehman Brothers held a policy until the 1920's that only family members were permitted to form legal partnerships
among this firm, then eventually branched off allowing other key members to be carried into the business.
Lehman Brothers continued to develop their financial strategies and invested heavily into the mortgage market. Once the firm became a practitioner for
mortgages, the inflating housing market became an appealing investment. Consequently, Lehman purchased five mortgage lenders one of which
included BNC Mortgage, a subprime mortgage lender. These mortgages were offered to people who may not have the finest credit rating or the ability
to carry the mortgage should rate

Lehman BrothersLegacy : The Rise And Fall Of Greed?
Abstract
This paper describes about a firm called Lehman Brothers and how their high–risk culture and questionable deals contributed to their declaration of
Chapter 11 bankruptcy on September 15, 2008. Some of Lehman's main reasons to declare bankruptcy was their highly risky business model that
required it to raise billions of dollars per day to keep their operations going (Wiggins, Piontek, Metrick, 2014, p.1). Another reason was their
leadership who encouraged the risky culture of the firm and operating an accounting device name Repo 105 to keep assets off its balance sheet so it
may appear that the firm was not borrowing that much money (Robbins, 2016, pg. 178). The firm was able to do this because around the 2000s, there
was a deregulation of the financial industry that made it easier to do more financial projects such as proprietary trading, subprime mortgages, and real
estate market (Wiggins, et al, 2014, p.4–5). Which made the firm very successful until the financial crises happened and Lehman was not able to
secure any more funding to keep its operations running causing it to declare bankruptcy. The rest of this paper will go into detail about Lehman Brothers
tactics on how it got rich quick from the financial market and how their actions contributed to their downfall. Lehman Brothers' Legacy: The Rise and
Fall of Greed
There are many articles online about Lehman Brothers bankruptcy and how their actions and the housing bubble led to their demise. Though each

Lehman Brothers And The Subprime Mortgage Crisis Essay
On September 15th, 2008, Lehman Brothers filed for Chapter 11 Bankruptcy, the largest filing for bankruptcy in the history of the United States
(U.S.). During this time, Lehman Brothers was the fourth largest investment firm in the U.S. It declared $639 billion in assets and $613 billion in
debts (Wiggins, Piontek, & Metrick, 2014). They had come a long way from a general store in Alabama back in the 1800's. This company's downfall
can mostly be blamed on the subprime mortgage crisis of 2007/2008, surely there are many other reasons though. The U.S. government did not employ
any bailout tactics for Lehman Brothers like it did for J.P. Morgan Chase. The government did let some other firms go bankrupt, but their biggest
mistake was leaving Lehman Brothers out to dry. Their downfall had a much worse impact on the economy. It is estimated that this crisis cost the U.S.
economy (based on lost output) (goods and services not yet produced) anywhere from a couple trillion to $10 trillion dollars (Wiggins et al., 2014).
This is despite the vigorous efforts of the U.S. government and governments from around the world to stabilize and maintain their economies.
Lehman Brothers originally started out as a general store. In 1844, Henry Lehman started the business and eventually his two brothers, Emanuel and
Mayer, joined in. What started off as selling supplies to cotton farmers quickly turned to a commodities broker company. After the Civil War, Lehman
Brothers helped form and head the

Case Study Of Barclays PLC And Lehman Brothers
The research questions have two first essential frequency method acting for designing the research undertaking: first, to gather naturally–occurring
pricing information; and second, to analyze that data for what it Reveals about the attainment and how the end of the organization was affected base
with the acquisition. While these two fundamental methods require much elaboration and specification on the researcher part, they are the foundation
on which the analytical perspective is material body . The following ingredient listed below are considered to be a major contribution factor to a
goodness and well researched paper
Research Objectives
The below are objective lens that will form the basis of the research question
To critically evaluate ... Show more content on Helpwriting.net ...
The issue of staff staying put option in the organization was the key fruit indicator of the success of the consolidation of the acquisition of the
patronage (Segal, 2008). A few worry was raised regarding the fact that the integration was not processing effectively as there was an issue of staff of
the Lehman comrades who did not join Barclays or eventually joined other organizations of their interest with lesser study load or having better
working conditions while some of them just left field the firm due to the integration process. Also Barclays was accused of not handling the integration
process effectively, which resulted in the departure of the staff from the Lehman brother's

The Fall Of Lehman Brothers
The fall of Lehman brothers was the beginning of what would be a long road to recovery, one that we are still on in fact, the financial crisis sparked
fierce debates on how the banking sector was run. Many agreed that banks had become 'too big to fail' and that they took on risky investments without
any thought about the impact this would have on the world economy, this is because they believed they would be bailed out by the government. The
question that has been part of an endless drawn out discussion, ever since the beginning of the crash, is whether big banks should be broken up in to
smaller more manageable sized institutions. It is something that divides people, there are many differing opinions on how to handle the current
financial situation we are surrounded by. Within this essay, some of the key points of view from both sides of the argument will be put forward,
analysing both sides will lead the essay to conclude with whether banks should be broken up. The fact is the largest eighty corporations in the world are
all financial institutions, each of these institutions controlling hundreds of billions, even multiple trillions worth of assets. These are what is known as
megabanks, Admati (2013) and other economists believe that they are a particularly dangerous part of a fragile and inefficient financial system that
exposes masses of money to unnecessary risk and distorts the economy. Argument claim that making this system safer should be at the forefront of
people

Lehman Brothers
Lessons from Lehman Brothers: Will We Ever Learn? MGT 521 September 9, 2013
Introduction
Lehman Brothers financial services filed bankruptcy on September 15, 2008, in the New York Southern District U.S. Bankruptcy Court. Resulting in
an immediate 500 point drop in the Dow Jones (Did Ernst & Young Really Assist Financial Fraud? 2011). This day became known as ''Dark
Monday'' (Donaldson, 2012). This was to date, the largest bankruptcy filing in history unleashing a "crisis of confidence that threw financial markets
worldwide into turmoil, sparking the worst crisis since the Great Depression." However this financial icon's fall is no surprise. The bankruptcy
examiner released reports saying that the ... Show more content on Helpwriting.net ...
There are executives and top managers who seek the easy way to make the most money for them, without consideration for their shareholders who
should be the priority. There will be no end to people with varying motivations trying to gain an unfair or even illegal advantage to get more of it. It's
not unreasonable to expect companies to act ethically: this is one reason so many laws and regulations are implemented. However, it is just difficult to
find a company with a large number of personnel to conduct themselves ethically.
Conclusion
The Lehman Brothers case is another unfortunate financial crisis. Their company affected many shareholders and financial institutions around the
world. The leadership of Lehman Brothers failed to uphold their mission statement and the financial rewards for themselves undermine their
decision–making processes. Self–interest led them to make decisions that were extremely risky than their own internal controls were designed to
control, and top executives received high compensations for taking such risks. It appeared that other personnel with various intentions also made
irresponsible decisions without regard to those who would be adversely affected. Their company culture turned into "getting the biggest bang for your
buck," no matter what the potential cost of failure may be. Ethics were

Lehman Brothers Great Depression
Lehman Brothers was founded by German immigrant Henry Lehman and his two brothers Emanuel and Mayer in 1850. Lehman Brothers was able to
overcome many obstacles– "the railroad bankruptcies of the 1800s, the Great Depression of the 1930s, two world wars, a capital shortage when it was
spun off by American Express in 1994, and the Long Term Capital Management collapse and Russiandebt default of 1998." (Investopedia) But the
collapse of the housing market was one obstacle they could not overcome.
During the Great Depression the Glass–Steagall Act was enacted in 1933. The legislation prevented commercial and investment banks from competing
with each other and protected their balance sheets by having each sector focus on certain transactions. ... Show more content on Helpwriting.net ...
The firm recognized profits from 2005 to 2006, and in 2007 it reported a record net income of $4.2 billion on revenues of $19.3 billion. In the same
year, Lehman Brothers' stock reached an all–time high of $86.18 per share, giving it a market capitalization close to $60 billion." (Investopedia) The
bursting of the housing bubble was imminent. Defaults on subprime mortgages were at a seven–year high. The stock market had its biggest single–day
drop in five years on March 13. "In the post–earnings conference call, Lehman 's chief financial officer (CFO) said that the risks posed by rising home
delinquencies were well contained and would have little impact on the firm 's earnings. He also said that he did not foresee problems in the subprime
market spreading to the rest of the housing market or hurting the U.S. economy." (Investopedia) Bear Stearns, another investment bank, had two hedge
funds fail with the credit crisis in August. Lehman Brother's stocks fell strongly and it shut down its BNC unit in the same month.
Lehman Brothers underwrote the most mortgage–backed securities, gaining a portfolio four times that of its shareholders' equity at 85 billion dollars.
At the end of 2007 in the fourth quarter, Lehman's stocks rebounded. The firm however, did not take that opportunity to reduce its large mortgage
portfolio. That large portfolio coupled with its high degree of leverage at 31 made Lehman Brothers very vulnerable to the deteriorating market
conditions. In

The Financial Crisis Of The Fiscal Crisis
The 2007–2008 financial crisis is seen as one of the biggest failure of risk management. This is the reason why it has been described it as a credit
tsunami.
The aim here is to look at the state in which the financial market is at the moment after being hit by the 2007–2008 financial Crisis. The first part of
this report introduces some key issues that have affected the confidence in the banking sector and its importance in the banking sector. The second part
will provide explanations on how to restore confidence.
Confidence is very vital in the banking sector.
The 07–08 financial crisis known as credit crunch as led the confidence in the banking sector to a dramatic fall. Evidences have been proved for
example with customers redrawing their deposit form banks like northern rock.
As mentioned by Gerard Caprio (2005), a crisis always lives citizens cautious with their savings in the banking sector. Mistrust or lack of trust has led
to the failure of banks like Northern Rock and Lehman Brothers.
Why has confidence been dented?
Finding the way to promote confidence is very important because it will be the key to prevent or avoid another financial crisis. A recent study has
shown that bankers were making decision without knowing the securities of treasuries they were buying. Instead of basing everything on credit
worthiness, banks were more focus on interpersonal and individual relations (Ingves, 2014).
The first problem was with the customer behaviour. Banks are

The Lehman Brother's Bankruptcy
Allied Academies International Conference
page 43
THE LEHMAN BROTHER'S BANKRUPTCY: A TEST OF MARKET EFFICIENCY
Christine Pichardo, Longwood University Frank Bacon, Longwood University
ABSTRACT This study tests the market efficiency theory by examining the effect of the Lehman Brothers bankruptcy on several brokerage firms, as
well as the overall market. It would suggest that these brokerage firms would occur negative stock prices following the announcement of the Lehman
Bankruptcy. For this study, I analyzed 15 firms' stock price's risk adjusted rate of return before and after September 15,2008, some with larger assets in
Lehman than others. Results show stock prices dropping approximately 24 days prior to the announcement and ... Show more content on
Helpwriting.net ...
H21: The risk adjusted return of the stock price of the sample of investment firms is significantly negatively affected around the event date as defined
by the event period This study uses the standard risk adjusted event study methodology to test the stock market's response to the Lehman Brothers
Bankruptcy on September 15, 2008. Using Yahoo Finance, I found the historical stock prices for the 15 firms and the S&P 500 index during the
event study period. The event study period involved 180 days prior to the event and 30 days after, using day 0 as the event date. Using those prices, I
calculated the holding period returns for the companies (R) and the corresponding S&P 500 index (Rm) for each day using the formula: Current daily
stock return= (current day close price – previous day close price) previous day close price Current daily index return= (S&P current close– S&P
previous close) S&P previous close A regression analysis was then performed using the actual daily return of each company (dependent variable) and
the corresponding S&P500 index daily return (independent variable) over the pre–event period day –180 to –31 period prior to the event period of day
–30 to day +30) to obtain the alpha (the intercept) and the beta (standardized coefficient). Table 1 shows alphas and betas for each firm.
New Orleans, 2009
Proceedings of the Academy of Accounting and Financial Studies, Volume 14, Number 1
Allied Academies International Conference Table 1 Alpha 's and

Lehman Brothers Essay
Q1.
Lehman Brothers was the top 5 global investment banks who operated in U.S for more than 150 years providing services in Investment
Banking(dealing with mergers & acquisitions), Capital Markets(dealing with equity & fixed income products), and Client Services(dealing with private
client & private equity businesses) to corporate, government, clients & institutes having greater net worth .
A brief history–
1. 1840– Henry Lehman migrated from Germany to Montgomery, Alabama and opened up a small store selling dry goods & groceries which was
named to Lehman Brothers in 1850 when he was assisted by his brothers Emanuel & Mayer. Lehman's started trading cotton in exchange for money &
merchandise in 1858 & later moved to New–York. In 1887 they registered with New York Stock Exchange marking the evolution of the business from
commodities business to merchant banking firm. In 1960 they opened office in Paris. There were emerging partnerships as it acquired Abraham &
Co. in 1975 which later merged with Kuhn, Loeb & Co. In 1984, the American Express acquired Lehman Brothers & merged it with Shearson. The
co. registered on London Stock Exchange (1986) & Tokyo Stock Exchange (1988). Later in 1999, the co. had an alliance with Bank of Tokyo to
proceed with Japanese acquisitions. In 2002, Lincoln Capital Management's fixed income business was acquired & bought 2 new businesses in 2003
by the name Neuberger German & The Crossroads Group. On Sep–15, 2008– the co. was charged for chapter

Lehman Brothers And The Financial Crisis
Lehman Brothers Holdings, Inc. on September 15, 2008 was the fourth– largest U.S. investment bank, which sought Chapter 11 protection, ultimately
initiating the largest bankruptcy proceeding in history. Lehman Brothers was very successful in pursuing a high–leverage, high–risk business model to
fund its operations. Beginning in 2006, they began to invest aggressively in the real–estate related assets, soon having significant exposures to
subprime mortgages, just as the markets were turning for the worst. Lehman Brothers employed a staff of accountants and risk professionals to monitor
its balance sheets and risks constantly. It decided to take questionable actions to stay alive in the market. Nevertheless, they ultimately failed due to an
... Show more content on Helpwriting.net ...
Leman's demise was mainly its significant exposure to the subprime mortgage and real estate markets. As the markets began to slow down, a retraction
was sparked for short–term loans as the growing concerns of unknown exposures spread to other types of assets. Lehman relied on these short–term
markets to raise billions daily. Ultimately, it's inability to secure funding was their undoing.
This overview of the case provides Lehman's background information, it's controls, performance measures, key personnel, as well as the market and
regulatory environment during the financial crisis.
Questions:
1.How/why compliance with external controls does not ensure sufficient internal controls?
2.Do performance measures and the reporting of those measures play a role in economic crimes or misconduct?
3.Would the activities at Lehman and E&Y be considered fraud or misconduct and why?
The Rise and Fall of Lehman Brothers
Founding and Early Years
During the mid–1800s, Henry, Emanuel, and Mayer Lehman emigrated from Germany, to Montgomery, Alabama. In 1844, they established a small
shop that sold groceries to local cotton farmers. Often farmers paid their bills in cotton and the

The Financial Meltdown Of 2008
The Lehman Brothers scandal is what many consider to be the catalyst that started the financial meltdown of 2008. This paper is meant to look at
what took place during the start of the meltdown and what caused Lehman to fail. Who was involved? What caused one of the largest banking
institutions in history to fail? What could have been done differently? These are a few of the questions I'd like to address in the next few pages. In
the Fall of 2008 things were starting to look bad for Lehman Brothers. Much of their investments were in the housing market which was beginning to
fall, and fall hard. On Friday September 12, Hank Paulson the US Treasury Secretary under President George W. Bush, flew to New York for a
meeting regarding ... Show more content on Helpwriting.net ...
Fulds goals were essentially to "overtake rivals" like Goldman or Merrill who had been in the game for a long time, using borrowed money was his
solution to this. In 1994, right around when Dick Fulds was appointed CEO, Lehman shares were valued at $4/share, by 2007 at Lehman 's peak,
shares were valued at a staggering $84/share. This massive growth was primarily attributed to Lehman's expansion into other more complex
investments, including credit default swaps. As defined by Investopedia, "A credit default swap is a particular type of swap designed to transfer the
credit exposure of fixed income products between two or more parties. In a credit default swap, the buyer of the swap makes payments to the swap's
seller up until the maturity date of a contract. In return, the seller agrees that, in the event that the debt issuer defaults or experiences another credit
event, the seller will pay the buyer the security's premium as well all interest payments that would have been paid between that time and the security's
maturity date." At the time this was seen as a normal practice, but firms began to speculate with these swaps and this is what ultimately caused many
large financial firms like AIG to collapse. Risk was the name of the game and was how Lehman began to operate under Fuld. It was believed that the
firms creating these complicated risky investments were distributing risk wide

Lehman Brothers : Financial Crisis
Many financial entities experienced financial trouble as the housing bubble burst and mortgage–backed securities lost significant value, specifically the
investment bank Lehman Brothers. The Lehman Brothers filed for Bankruptcy in September 2008. Before filing for bankruptcy and years prior to the
housing bubble burst, the Lehman Brothers' balance sheet was growing rapidly during the beginning of 2006. This was mainly due to the many
long–term investments financed through short–term borrowing. These assets included a significant amount of residential and commercial
mortgage–backed securities, the same type of securities that precipitated the 2008 financial crisis. Although the market for mortgage–backed securities
was showing signs of trouble during 2007, Lehman continued its aggressive growth expecting to benefit from the countercyclical crisis (Hines, Kreuze,
and Langsam 2011). During this time, Lehman took on more risk, ignoring its own risk models, while also excluding some assets from their risk
analyses. These assets became a lot more difficult to sell without incurring significant losses. Lehman was able to maintain acceptable leverage ratios
through questionable accounting methods, which allowed Lehman to paint a perfect picture of its leverage ratios and to allegedly mislead investors. A
common financing tool that Lehman frequently used, as well as other investment banks, were repurchase agreements, also known as repos. A
repurchased agreement is a

Martin Shkreli's Career And His Position At Turing...
Before discussing Turing Pharmaceuticals, LLC., it is important to fully understand the history of Martin Shkreli's career and his position at Turing
Pharmaceuticals, as they have a causal significance in the development of the scandal.
1983: Martin Shkreli was born and raised in a working class family in Brooklyn, New York.
2000: At the age of 17, Shkreli interned at the Wall Streethedge fund Cramer, Berkowitz and Company. While interning at the hedge fund, Shkreli
recommended short selling biotech stocks. Short selling is a trading strategy that seeks to capitalize on the anticipated decline of a security.
Opportunely, the company profited, and Shkreli worked at the hedge fund until 2005.
2006: Shkreli started Elea Capital Management.
2007: The Wall Street investment bankLehman Brothers sued Elea Capital Management for failing to pay a put option, essentially a bet that the market
would fall. Lehman Brothers won a $2.3 million default judgment in the lawsuit. Luckily for Shkreli, Lehman Brothers collapsed from bankruptcy
before they collected on the ruling against Elea Capital Management.
2009: Shkreli launched MSMB Capital Management with his friend Marek Biestek where he continued to short sell biotech companies and berated
those companies online.
2011: In February, Shkreli founded Retrophin, a pharmaceutical company. That same month, MSMB Capital Management made a bad bet shorting a
biotech company called Orexigen Therapeutics. MSMB lost $7 million and

Barclays Lehman Hrm Challenges
|Organizational Behaviour |
|Barclays PLS & Lehman Brothers Merger |
|Yasir Irshad |
[pic]
Executive Summary
The Human Resource Management challenges faced by the Barclays PLC after merger with Lehman Brothers were mainly the low motivational levels
of Lehman Brothers employees which were due to demise of Lehman Brothers and merger with Barclays PLC. Another factor was of personality
differences between employees and groups of employees. They were required to have a very strong and clear communication with all the stakeholders
as communication is a tool which is of most importance in scenario of mergers. ... Show more content on Helpwriting.net ...
This is due to unclear communication between the stakeholders of the concerned organisations.
HRM challenges
Mergers have become the way to go in the current climate of instability due to the recession. Since more and more companies are now showing the
openness and eagerness towards mergers to enhance the business or to achieve stability, the issues associated with mergers are ever so under scrutiny
than ever before.
The human resource management issues related to mergers are categorised in two phases which are known as Pre–Merger Phase and Post–Merger
Phase. It is important for managers managing the merger to not neglect the human resource management at any stage of the merger process. Only
through human resource management the people can be assured of the changes the merger will bring.
In the case of merger between Barclays PLC and Lehman Brother, the main human resource management challenges were the difference in cultures of
the two organisations involved in the merger process and also the Motivation of staff from both companies and especially those from Lehman Brothers.

People problems are a major cause of failed mergers, and you must ensure that most if not all of the people you want are still in place at the end of
the integration period. This is best achieved by carrying out an employee selection process whose pace and substance matches the kind of merger
involved. (Kay and Shelton[1])
The main issues faced by human resource

U.s. Treasury Bond Market
2.U.S. Treasury Bond Market
Yields on U.S. treasury bonds especially on the bonds with a maturity up to one year decreased significantly between 2007 and 2009 as shown in the
graph below. The one–month treasury bond yield decreased from 4.79% in January 2009 to 0.04% in December 2009. In the beginning of 2007 bond
yields were very high and therefore mortgages takers with adjustable–interest rates had high interest payments. All this led to a high number of default
and strong decrease in house prices. This general weaker economic situation led to a decrease in Bond yields. The decrease became even faster at
the end of 2007, when the more creditworthy borrowers were also unable to repay their mortgages. As reaction to the bad economic situation in
2008 the FED has opened its discount window and lowered the discount rate by 1% in order to make it cheaper and easier for banks to access
money. Both lead to a further decrease in the bond yields as people had no more trust in the products sold by investment banks and therefore looked
for save ways to invest their money. One of this save options to invest money is lending money to the U.S. government in forms of U.S. Bonds. So
the change in yields basically happened because there was a high demand for save ways to invest money and therefore a high demand for U.S. bonds.
The high demand for bonds resulted in high prices and thus low yields.
3.Bear Stearns
The failure of Bear Stearns began in 2007 as two hedge funds managed by

Lehman Brothers
Research a failure that occurred at a large organization such as Tyco, Chrysler/Daimler–Benz, Daewoo, WorldCom, or Enron. In an APA formatted
paper that is no longer than 1,050 words, describe how specific organizational behavior theories could have predicted or can explain the failure of the
company. Compare and contrast the contributions of leadership, management, and organizational structures to the organizational failure.Lehman
Brothers Holdings Inc, the fourth largest US investment bank, succumbed to the sub prime mortgage crisis in the biggest bankruptcy filing in history.
The 158 year old firm, which survived railroad bankruptcies of the 1800s, the great depression in the 1930s, & the collapse of long term capital
management a ... Show more content on Helpwriting.net ...
Lehman said that poor market conditions in the mortgage space "necessitated a substantial reduction in its resources and capacity in the subprime
space". At the end of August '07, Lehman had $600 billion of assets financed with just $30 billion of equity. Having so little capital meant that a 5
percent decline in assets would wipe out the value of the company, which investors saw as a real risk due to the company's billions of dollars of
mortgage securities. In 2008, Lehman faced an unprecedented loss to the continuing subprime mortgage crisis. Lehman's loss was apparently a result of
having held on to large positions in subprime and other lower–rated mortgage tranches when securitizing the underlying mortgages; whether Lehman
did this because it was simply unable to sell the lower–rated bonds, or made a conscious decision to hold them, is unclear. In any event, huge losses
accrued in lower–rated mortgage–backed securities throughout 2008. In the second fiscal quarter, Lehman reported losses of $2.8 billion and was
forced to sell off $6 billion in assets. In the first half of 2008 alone, Lehman stock lost 73% of its value as the credit market continued to tighten. In
August 2008, Lehman reported that it intended to release 6% of its work force, 1,500 people, just ahead of its third–quarter–reporting deadline in
September. On August 22, 2008, shares in Lehman closed up 5% (16% for the

Lehman Brothers Essay
Lehman Brothers
On September 10, 2008, Lehman Brothers announced the lowest decline as the shares dropped to 45%. It left the market value at $5.4 billion after
the Korea Development Bank rejected to make an investment deal that could rescue Lehman. The company would seek capital from other investors in
order to recover their financial situation. These efforts faltered and the situation grew more severe, even after the US government had already saved
the Bear Stearns and Fannie Mae and Freddie Mac. Though it is less likely that the US government will keep Lehman's bailout, there should be a
resolution from the Federal Reserve System to bolster Lehman's finance so as to prevent the US economic declination.
II Problems and ... Show more content on Helpwriting.net ...
It is likely that this time the government would not provide taxpayer funds to back up Lehman.
III Conclusions
Since the decline in stock continued, Lehman sought for solutions by selling their asset management division, reducing dividends, and laying off
employees. They also thought of splitting their commercial mortgage assets with the new company. However, it seems as though that would not be
sufficient enough for them to recover their financial situation. Even if Lehman would sell their whole firm to the new investor, it would be impossible
without the support from the Federal Reserve System.
However, if the US government decides to help Lehman with taxpayers' money, including those amounts paid by Idaho citizens, this case will become a
practical joke. The other investment institution will consider that they can invest on risky business without worrying about the business failure, since
there will be money support from the government. I agreed that the government should rescue Lehman since their collapse will have a huge effect on
US economy, but utilizing taxpayers' money is not the right way to support a personal business. Instead, the government could help Lehman by
endorsing Lehman's business deal with international firms that have sufficient funds to rescue the collapsing business. The Idaho citizens can be
assured that the US government won't

The Financial Crisis Of 2008-2009
The financial crisis of 2008–2009 was an extremely significant event in recent history and has been described as "perhaps the most important
economic event since the Great Depression" (Gorton & Metrick, 2012, p.g. 150). We are still experiencing the effects of the crisis today and there is
a considerable amount of literature on the subject. There has been much research into the crisis and what caused it (Gorton and Metrick, 2012). Using
some of this research both the causes and effects of the financial crisis can be explored. This essay will discuss what happened in the months leading
up to the crisis, the causes and effects of the financial crisis and tackles some of the questions that researchers have asked regarding the events of
2008–2009.
Mishkin (2011) discussed the idea that when analysing the causes of the financial crisis the events should be split into two separate periods. The period
occurring towards the end of 2007 and beginning of 2008, which involved lending within subprime markets and the end of the housing bubble, and the
second occurring in September 2008, beginning with the bankruptcy of Lehman Brothers (Mishkin, 2011, Gorton & Metrick, 2012).
Although the start of the financial crisis is thought of by most to be in September 2008, when investment bank Lehman Brothers declared bankruptcy,
some of the main contributing factors actually occurred prior to 2008. During the early 2000's interest rates were low and as a result more people
were able to afford

The Failure of Lehman Brother
Should Lehman Brothers Investment Bank
Have Been Allowed to Fail?
Name: Ran Linyan
Table of Contents
1Introduction3
2Corporate profile of Lehman Brothers Bank3
2.1 Corporate Profile and Business4
2.1.1History of Lehman Brothers4
2.1.2Lehman Brothers Investment Bank4
2.2 Forces of Change and Competition in Lehman Brothers4
2.2.1Change in Lehman Brother's Business Strategy4
2.2.2Financial Competiveness in Lehman Brothers5
2.3 Financial System and Bank Management Attitudes5
2.3.1Deregulation of United States Financial System5

2.3.2Bank's Lending Policies6
2.3.3Bank's Risk Management Attitude6
3Causes of Lehman Brothers Bank Failure6
3.1. ... Show more content on Helpwriting.net ...
Before the firm became bankrupt, they had more than $275 billion in assets under management. Furthermore, since the time the bank went public in
1994, the firm had increased net revenues over 600% from $2.73 billion to $19.2 billion and increased its employee headcount over 230% from 8,500
to almost 28,600 (Demyanyk, Y. S. and Hemert, O. V. 2008).
2.2 Forces of Change and Competition in Lehman Brothers
2.2.1Change in Lehman Brother's Business Strategy
In 1994, Richard S. Fuld took control of Lehman Brothers as its Chief Executive Officer (CEO). Under Fuld's aggressive leadership, the company
flourished and became one of the largest investment banks in the United States. пј€
Crossley–Holland 2009) reported that in 1994, each Lehman
Brothers stock was averaging at $4 and by 2007 it catapulted to $82 creating a 20 fold increase. From 1994, Lehman Brothers gradually adopted an
aggressive growth business strategy by expanding into highly complex and risky products such as Credit Default Swaps (CDS) and Mortgage–Backed
Securities (MBS). By 2007, Lehman Brothers was the biggest underwriter of mortgage–backed securities of the U.S. real estate market.
2.2.2Financial Competiveness in Lehman Brothers
Lehman Brothers faced stiff competition from other leading investment

Collapse of Lehman Brothers
Collapse of Lehman Brothers
Lehman Brothers was an investment bank that went back to the 1850s, surviving the Civil War, two World Wars, the Great Depression and any other
great misfortune that this 160 year old company's history had gone bankrupt. Lehman brothers were an important part in the financial and commercial
industries in the United States. People may have thought that leverage was a bad thing; they should have realized that a dry–goods store turned into a
huge investment bank then years later bringing attention to the whole world. Lehman brothers began when an immigrate by the name Henry Lehman
came from Germany and settled in Montgomery, Alabama where he started a small shop selling groceries, dry–food and utensils to ... Show more
content on Helpwriting.net ...
On September 10, Lehman announced a gloomy fiscal third–quarter of how they are financially. They reported a loss of $3.9 billion, which had a
write–down of $5.6 billion, and announced a way to find a strategic move to fix their business. Also on September 10 Lehman Brothers had to sell
off Neuberger Berman to raise capital. Lehman had no option but to file for bankruptcy. That same day, Moody's Investor Service said, "that they
were going to review Lehman's credit ratings, and also said that Lehman would have to sell a majority stake to a strategic partner in order to avoid a
rating downgrade". This progress led to a 42% plunge in the stock on September 11. Lehman only had $1 billion left in cash by the end of that week;
they were beginning to run out of time. The weekend of September 13 Lehman, Barclays PLC and Bank of America, aimed at assisting to takeover of
Lehman, but ended up to be unsuccessful. That Monday Lehman had to declare bankruptcy, ensuing in the stock to plummet to 93% from its previous
close on September 12.
Besides having problems with mortgage and credit problems most of Lehman's problems were holding on to low credit tranches and holding way too
long on to subprime mortgages. The second quarter lost about $2.8 billion and they had to liquidate $6 billion in assets. Here is a

The Downfall Of Henry Lehman
INTRODUCTION In 1844, Henry Lehman moved from Rimpar, Germany, to Montgomery, Alabama where he set up a little shop offering basic
needs, dry merchandise, and utensils to the nearby cotton ranchers. By 1850, his two siblings, Emanuel and Mayer, had gone along with him in the
business, and they named it Lehman Siblings. After Henry Lehman 's demise in 1855 at 33 years old, the two more youthful siblings headed the firm
for the following four decades. Amid their residency, just relatives–children, siblings, and cousins–were allowed as accomplices. This was an approach
that proceeded until the 1920s. Not long after its establishing, Lehman Siblings developed from a general promoting business to a wares expedite that
purchased and sold cotton for the grower living in and around Montgomery, Alabama. "Ruler Cotton" overwhelmed the economy of the southern
Joined States in the 1850s. As the business grew, a brief organization was framed with cotton vendor John Wesley Durr to fabricate a cotton
stockpiling stockroom, empowering Lehman Siblings to take part in bigger deals and exchanges. A New York office was opened in 1858, giving the
firm a more grounded nearness in the items exchanging business and also a solid footing in the budgetary group. The quick advancement of the
railways changed the nation from an agrarian to a mechanical economy in the years taking after the Common War. The blast in railroad development
brought about enormous movement on Divider Road, as

The Challenges And Failure Of The Board Of Lehman Brothers
Essential for a firm's survival and its ongoing success is effective corporate governance. Indeed, when executed effectively, corporate governance
helps to not only "prevent corporate scandals, fraud and civil and criminal liability but also enhance a company's image in the public eye" (Sun, 2010).
This, in turn, positions a firm as a self–policing institution, accountable and worthy of shareholder and debtholder capital. Responsible for charting the
strategic direction, approving policy and ensuring that the mission statement of a firm is carried out, is the Board of Directors. (Coastal Community ,
2013) notes that "directors, also, have a responsibility to maintain the balance between economic and social goals and between individual and
collective goals, reflected through the efficient and effective use of limited resources. The Board of Lehman Brothers is an example of a board that
failed to execute several key corporate governance responsibilities. These key responsibilities of good corporate governance fall under four main
pillars according to (In Share ) 1) Accountability (ensure that management is accountable to the board and that the board is accountable ... Show more
content on Helpwriting.net ...
This failure is in direct violation of the corporate governance pillar of fairness as these funds where owned by investors, as such it is the boards duty
to protect the interest of its shareholders and not to abuse they positions. The Directors of Lehman brothers failed to protect its shareholder and
instead look out for that of top executives. This manifested into the then Board of directors, removed critical funds from the firm to pay top
executives around $1 billion respectively over a period of time from 2000–2008. The Board also awarded the chairman a remuneration of estimated
500 million by (Lehman Brother ) mere days before the firm declared

Lehman Brothers Case Study
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Using the
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History of
Lehman Brothers
History of Lehman Brothers
With a special focus on recognizing the potential of promising industries and helping finance the expansion of these enterprises, Lehman Brothers
played an important part in the financial and commercial history of the United States for more than 150 years. The history of the firm offers an inside
look at the emergence and growth of American industry and technology as well as the establishment of the modern corporation.
Laying the Foundation Mayer Lehman, 1867. Courtesy of the Rare Book and Manuscript Library at Columbia University.
Emanuel Lehman. Courtesy of the Rare Book and Manuscript Library at Columbia University.
In 1844, Henry Lehman immigrated from Rimpar, Germany, to Montgomery, Alabama where he established a small shop selling groceries, dry goods,
and utensils to the local cotton farmers. By 1850, his two brothers, Emanuel and Mayer, had joined him in the business, and they named it Lehman
Brothers. After Henry Lehman's death in 1855 at the age of 33, the two younger brothers headed the firm for the next four decades. During their tenure,
only family members–sons, brothers, and cousins–were permitted as partners. This was a policy that continued until the 1920s.

Soon after its founding, Lehman Brothers evolved from a general merchandising business to a

The Collapse Of Lehman Brothers Holdings Inc.
1.Introduction
158–years–old institution, the Lehman Brothers Holdings, Inc., Sought chapter 11 protections on September 15, 2008, indicating the largest
bankruptcy filed in the U.S. history. The Lehman declared $639 billion in assets and $619 billion on debts, which surpassed the previous bankruptcy
filed by WorldCom and Enron. The Lehman brother was 4th best–ranked U.S. Investment bank and globally 7th best investment bank before the
collapse. An industry that had 25,000 employees worldwide crumbled into almost nothing within a week, which is one of the seminal event in the
global financial crisis. The Lehman Brothers' demise was a result of substantial attention to the U.S. subprime mortgage and the real estate markets that
coaxed into global financial crisis, when these markets began to slow–down.
2.The History: Lehman Brothers Holdings Inc. early founding
German immigrant Henry, Emanuel, and Mayer Lehman founded the Lehman Brothers Holding Inc. on 1844. They started with a small groceries shop
in Montgomery, Alabama and eventually extended their business to become a commodities broker that bought cotton from landers and sold it to the
planters in Montgomery. The cotton ruled the Southern United States economy in 1850s. As business developed, the Lehman Brothers formed brief
partnerships with that times big cotton merchant John Wesley Durr to build warehouse to store cotton and to involve on larger trades and sales.
For more than 150–years Lehman Brothers played

The Collapse of Lehman Brothers
On September 15, 2008, Lehman Brothers filed for bankruptcy. 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 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 ...
Show more content on Helpwriting.net ...
Lehman 's so–called countercyclical strategy was terminated by mid–2007, as its losses and illiquid assets were beginning to get out of control. Neither
during the last quarter of 2007 nor during the first quarter of 2008, however, did Lehman attempt to raise equity or sell of assets. During this period, it
also used an accounting trick to remove some $50 billion from its books
("Repo lOS"). By this time, Lehman 's dependence on the short–term repo market had also increased dramatically and was nearly 26% of its liabilities
or twice that of peer banks (Valukas, 2010, p. 1407).
Despite all of these failures, Fuld insists that it was rumors and short selling that brought down Lehman, not its huge losses in a deteriorating economy
and his own failure to deal with this. "Ultimately what happened to Lehman Brothers," Fuld (2008b, p. 8) would later say when he testified at
Congress, "was caused by a lack of confidence."
While it seems that Fuld believed that Lehman could weather any storms it faced during the spring and summer of 2008, investors were getting
increasingly nervous. While many banks had declared heavy losses and write–downs, Lehman was not one of them. In fact,

Financial Crisis And The Collapse Of The Lehman Brothers
It is almost mandatory that every company, institution, firm, organization, business or enterprise – small or huge – has to undergo a financial crisis.
Once in a while, it must find it hard to balance its books of accounts. If the situation gets severe, then the organization may even close down. This
paper will give a detailed review of one institution –The Lehman Brothers – whose financial crisis led to its fall (Wong & Smith, 2010). It will examine
the beginning, the end, and the outcomes of the same. In addition to that, the report will also analyze the government policies that relate to the fall of
the Lehman Brothers. In details, this paper covers the reasons for the crisis, the impact of the crisis on financial markets and institutions, the impact on
the global economy, the response to the financial crisis (the bailout plan and the effect of it on capital markets), as well as the aftermath of the crisis
that cause the collapse of this Company. In a way, this paper connects the knowledge I gain from the classroom to the current financial situation, to
apply the concepts that I learn in this class, and to better understand the financial system in the United States.
Rationale
The goal is to study, analyze and report findings of the recent "Financial crisis", and since the Collapse of Lehman Brothers is one of such is, it suits
this context. At the same time, it is one of the enlisted topics that the professor asked the class to consider in handling this assignment,

Lehman Brothers Case Study
Lehman Brothers Holdings, Inc. (Case 1.2)
Case Summary
When Lehman Brothers filed for bankruptcy in September 2008 it was the largest corporate filing in our country's history. Lehman Brothers Holdings
Inc. declared $639 billion in assets and $613 billion in debt (Florescu, 2017). The filing of Lehman Brothers bankruptcy created a mass panic in the
financial markets which caused an economic shockwave in both the U.S and foreign markets. Lehman's collapse aggravated global financial markets
for weeks, due to the size of the company and its status as a major player in the United States as well as internationally (Florescu, 2017).
Lehman Brothers made massive dollar amount transactions which heightened the company's overall net leverage ratio, which is an important metric
when determining the overall financial position a company sustains. In 2007, Lehman Brothers operating numbers were extremely encouraging to the
naked eye. The executives at Lehman Brothers however knew the company was in an extremely vulnerable position that investors were oblivious to,
which was that they had bought billions of dollars in residential mortgage–backed securities. Management was under a great amount of pressure to
come up with a resolution for solving this problem, at the same time the U.S housing market bubble was busting. The executives at Lehman Brothers
elected to reduce the company's net leverage ratio in a marginally unethical manner. This improvised tactic involved engaging in a large

Lehman Brothers & Subprime Crisis
Introduction The global financial crisis that erupted in September 2008 has thrown economies around the world into a recession. The root cause were
sown in the credit boom that peaked in mid–2007, followed by the meltdown of sub–prime mortgages and securitized products. Fannie Mae and
Freddie Mac were both taken over by the government and on September 24, 2008, Lehman Brothers declared bankruptcy after failing to find a buyer.
The fall of Lehman Brothers rattled the global market and led to a great drop in the United States (U.S.) stock market the day after the announcement.
The sudden failure of Lehman Brothers is widely viewed as a watershed moment in the global financial crisis of 2007 – 2009. With over $639 billion
in assets and... Show more content on Helpwriting.net ...
With the U.S. housing boom well under way, Lehman Brothers acquired five mortgage lenders; including subprime lender BNC Mortgage. BNC is
ranked as one of the nation's top 100 mortgage lenders and the eighth largest wholesale subprime lender (Mortgage info, 2007). BNC Mortgage, as the
subsidiary of Lehman Brothers Holdings Inc. became the biggest underwriter of U.S. bonds backed by mortgages. As securitization of mortgages
increased, the investment banks urged the mortgage lending industry to increase their loan volumes. However, on August 22, 2007, Lehman Brothers
decided to close down its subprime–lending unit; BNC Mortgage, causing about 1,200 employees to lose their jobs (Onaran, 2007). Figure 2: The
downfall of Lehman Brothers Until 2007, Lehman Brothers has generated a significant portion of its revenue through the issuance of mortgage–backed
and asset–backed securities. Lehman Brothers had grown increasingly reliant on its fixed income trading and underwriting division which served as
the primary engine for its strong growth throughout the first half of the decade as shown in Exhibit 1 (Stowell, 2010). When the collapse of the U.S.
subprime mortgage industry started, it result in credit crisis and the mortgage default rates began to rise and the demand for these securities began to
disappear. Lehman Brothers was left with billions of dollars of rapidly depreciating securities on its balance sheet,

The Collapse Of The Lehman Brothers
The global financial crisis of 2008 that reeked havoc on most of the financial institutions had them fall into liquidation and bankruptcy. One of the
most popular and most debated incident was the failure of the Lehman Brothers. The Lehman Brothers were a leading US investment bank that was
worth $600 billion (D'Arcy). The global financial crisis prompted Lehman Brothers to close its leading subprime lender (BNC Mortages) in 23
locations (). The closing of these locations were so aggressive that the company filed for voluntary bankruptcy on September 15, 2008 ("Lehman
Brothers Collection"). The file for bankruptcy was needed after an unsuccessful attempt for a government bail–out and mergers. Although this was a
United States based... Show more content on Helpwriting.net ...
The company was family–oriented; the only employees were relatives. This was until the business formed a partnership with Goldman and Sachs in
the early 1900's ("Lehman Brothers Collection"). This partnership allowed the company to grow fast, and become designated to sell State bonds from
Alabama's government. This allowed Lehman Brothers to enter the financial market. The company continued their operations in the financial market
until 1975. Lehman Brothers merged with Kuhn, Loeb and Company and became the fourth largest investment bank in the United States. Lehman
Brothers had steady growth with an increasing revenue base and their work force has increase from 8,500 to an estimated 28,000 in 1994. On
September 15, 2008, Lehman Brothers Holdings, Inc. sought Chapter 11 protection, igniting the largest bankruptcy proceeding in United States
history. Prior to this filing, in January 2008, Lehman Brothers reported record revenues of nearly $60 billion and record earnings in excess of $4
billion for its fiscal year ending November 30, 2007 (Lehman Brothers Quarterly Report). Their stock price was trading at record heights at $86.18 per
share (Carther). Not even eight months after the highest stock prices were being reached, the company filed for bankruptcy. According to one source,
the company had $639 billion in assets and $619 billion in debt (Carther). This was one of the largest bankruptcy filings in history, including
WorldCom and Enron. The firm was the largest

Financial Analysis : Lehman Brothers Holdings Inc.
INTRODUCTION
Lehman Brothers Holdings Inc. was a worldwide monetary administrations firm. Lehman was the fourth–biggest speculation bank in the US [behind
Goldman Sachs, Merrill Lynch and Morgan Stanley] before going into bankruptcy in 2008. Its business activities involves investment, research,
investment management, equity and fixed–income sales and trading and so on
September 15, 2008, the firm recorded for insolvency insurance after the massive collapse of about 25,000 workers, extreme misfortunes in its stock,
and depreciation of its advantages. Lehman 's liquidation recording is the biggest in US history with $639 billion in holdings and $619 billion in
obligation, as its benefits far surpassed those of past bankrupt giants example: WorldCom and Enron. This is thought to have assumed a real part in the
unfolding of the late 2000worldwide global financial crisis. The accompanying day, Barclays reported its consent to buy Lehman 's North American
venture managing an account and exchanging divisions alongside its New York central station building. On September 20, 2008, a reconsidered
rendition of that assertion was sanction by US Bankruptcy Court Judge James M. Peck. A week later, Nomura Holdings published that it would gain
Lehman Brothers ' establishment in the Asia–Pacific area, including Japan, Hong Kong and Australia and additionally Lehman Brothers ' venture saving
money and values organizations in Europe and the Middle East. The arrangement got to be

Repo 105 Auditing
The summary provided details surrounding the Lehman Brothers' executives and the development of the Repo 105 transactions utilized to improve the
financial statement results, however, more information is needed involving the auditing firm Ernst & Young (E & Y). William Schlich, the lead
auditor, was intimately involved in the accounting and auditing acceptance of the Repo 105 process and his obstinacy with the bankruptcy examiner
sheds negative light on E & Y. Schlich's unreasonableness and obstructing the examiner from performing his duties only shows how E & Y was
intimately involved, especially when these transactions were not noted in previous audits. Overall, the summary provided the detailed information
needed to understand the intricacies ... Show more content on Helpwriting.net ...
They are not legally bound to investigate; however, it only makes sense to investigate to ensure there is no impropriety. This report helps the auditors to
dig deeper into the information concerning the Repo 105 transactions.
8.) E&Y is a defendant in Lehman–related lawsuits filed in both state and federal courts. Identify the factors that influence E&Y's legal exposure
between lawsuits filed in state courts versus those filed in federal courts. Lehman Brothers executives and E & Y auditors are liable for the federal
and state suits filed depending on the materiality of their involvement. For instance, Ong & Yeung (2011) says, "...regardless of whether technical
compliance was achieved, a 'colourable' claim existed regarding Lehman's failure to disclose its Repo 105/108 practice that rendered the firm's
financial statements materially misleading" (p. 101). Another factor identified, Ong & Yeung (2011) notes, "...colourable claims against the officers
and directors of Lehman in connection with their failure to disclose the use of the practice and against its auditors for their failure to meet
professional standards in connection with that lack of disclosure (p. 101). Criminal and civil (federal and state for both) charges can be brought
against Lehman and E & Y. Jeffers states, "If Lehman's CEO and CFO knew of the Repo 105 transactions and knew that

Lehman
Question 1:
From this case study, it showed how Lehman Brothers walked down to the end of it business. Through Lehman Brothers' case, it reflects the ugly side
of a corporate. A big recognized company collapse due to it unsuccessful leadership management, culture and dishonesty by it people caused the
company walked down to the end of it business. There are several points showed how it gone bankrupted. By using the ethical perspective to look at
Lehman Brothers' situation, it showed that the company being dishonest to it clients, failure in the company leadership and corporate management are
the major problems that lead to the company downfalls. As a Wall Street icon, they disappointed the public and being irresponsible towards... Show
more content on Helpwriting.net ...
This may caused the unwillingness and disobedience of some employees in Lehman because their opinion did not get the attention from the
management, whereas only those who did their job just to achieving their personal values and goals get good rewards from the company. They use to
reward employees with lots of money for taking risks, to encourage risk taking to earn better profit. Because of the rewards, Employees has drive to
work harder to get better money but has forgotten to put their clients into consideration by lower down the risk and to do better and deeper analyses
before taking every move. Furthermore, in the case of Lehman Brothers, it showed a company that did not put his people/ employees into
consideration or as assets of it company. This showed when Lehman decided to lower the medical insurance costs just to get an expense off the
balance sheet, and rejected the suggestion of a loyal consultant than has been worked sincerely 9 years with Lehman just to cover the company's ass
with some unethical decision. Moreover, the third party, Ernst & Young aware of the use of Repo 105 by Lehman but did not voice out or report
to the related association. Being a top professional auditor firm, E&Y did not perform it professionalism to show responsibility to it firm and try to
help the unethical party to hide it true situation of it company. In this scenario, it showed the unethical issue that always happens in the business
industry, Corruption. In my

History Of Lehman Brothers By Henry Lehman

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