Lehman Brothers Case Study

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Lehman Brothers Charlotte Gilbert Financial Accounting Northampton County Community College May 4, 2012 Business Ethics: Lehman Brothers Case Study Lehman Brothers was founded in 1850 by two cotton brokers in Montgomery, Ala. The firm moved to New York City after the Civil War and grew into one of Wall Street’s investment giants (The New York Times, Lehman Brothers Holdings Inc). In 1887 the firm became a member of the New York Stock Exchange. In the 1960s and 1970s, when many U.S. companies began to expand internationally, Lehman Brothers increased its global presence as well, opening offices in Europe and Asia. Prior to going bankrupt, the firm had in excess of $275 billion in assets under management. Altogether, since going public in 1994, the firm had increased net revenues over 600% from $2.73 billion to $19.2 billion and had increased employee headcount over 230% from 8,500 to almost 28,600. At the 2008 ALB China Law Awards, Lehman Brothers was crowned “Deal of the Year” and “Debt Market Deal of the Year” (Wikipedia, Divestment and independence (1994–2008). Lehman Brothers became so caught up in the subprime lending crisis it eventually lead to its demise in 2008 (Harvard Business School). Ethics – A Key Concept On September 15, 2008 Lehman Brothers files for chapter 11 bankruptcy (Wikipedia, Bankruptcy of Lehman Brothers). The largest bankruptcy in the world is hard to ignore. Lehman Brothers was the single largest bankruptcy in history, nearly bringing down the global economy. That’s larger than General Motors, Washington Mutual, Enron and WorldCom combined. The federal bankruptcy court appointed Anton Valukas a prominent Chicago lawyer and former United States attorney to conduct an investigation to determine what happened (CBS News 60 Minutes). Valukas stated that the company executives

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