Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest
investment bank
Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort.
In finance, the purpose of investing i ...
Morgan Stanley
Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
trading
Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market.
An early form of trade, barter, saw the direct excha ...
(especially U.S.
Treasury securities
United States Treasury securities, also called Treasuries or Treasurys, are government debt instruments issued by the United States Department of the Treasury to finance government spending as an alternative to taxation. Since 2012, U.S. gov ...
private equity
In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a t ...
, and
private banking
Private banking is banking, investment and other financial services provided by banks and financial institutions primarily serving high-net-worth individuals (HNWIs)—defined as those with very high levels of income or sizable assets. A bank that ...
. Lehman was operational for 158 years from its founding in 1850 until 2008.
On September 15, 2008, Lehman Brothers filed for
Chapter 11 bankruptcy protection
Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, whet ...
following the exodus of most of its clients, drastic declines in its stock price, and the devaluation of assets by
credit rating agencies
A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of default. An agency may ra ...
. The collapse was largely due to Lehman's involvement in the subprime mortgage crisis and its exposure to less liquid assets. Lehman's bankruptcy filing was the largest in US history, and is thought to have played a major role in the unfolding of the
financial crisis of 2007–2008
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fi ...
. The market collapse also gave support to the "
Too big to fail
"Too big to fail" (TBTF) and "too big to jail" is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the great ...
" doctrine.
After Lehman Brothers filed for bankruptcy, global markets immediately plummeted. The following day, major British bank Barclays announced its agreement to purchase, subject to regulatory approval, a significant and controlling interest in Lehman's North American investment-banking and trading divisions, along with its New York headquarters building. On September 20, 2008, a revised version of that agreement was approved by U.S. Bankruptcy Court Judge James M. Peck. The next week,
Nomura Holdings
is a Japanese financial holding company and a principal member of the Nomura Group. It, along with its broker-dealer, banking and other financial services subsidiaries, provides investment, financing and related services to individual, institut ...
announced that it would acquire Lehman Brothers' franchise in the Asia-Pacific region, including Japan, Hong Kong and Australia, as well as Lehman Brothers' investment banking and equities businesses in Europe and the Middle East. The deal became effective on October 13, 2008.
History
Under the Lehman family (1850–1969)
In 1844, 23-year-old
Henry Lehman
Henry Lehman (born Hayum Lehmann; September 29, 1822 – November 17, 1855) was a German-born American businessman and the founder of Lehman Brothers, which grew from a cotton and fabrics shop during his life to become a large finance firm under ...
,Geisst, Charles R. ''The Last Partnerships''. McGraw-Hill, 1997, page 49 the son of a Jewish cattle merchant, emigrated to the United States from
Rimpar
Rimpar is a market town in the district of Würzburg in the German state of Bavaria. It is located about 10 km (6 mi) north of the City of Würzburg. The municipality includes the villages of Gramschatz and Maidbronn, incorporated in 19 ...
,
Bavaria
Bavaria ( ; ), officially the Free State of Bavaria (german: Freistaat Bayern, link=no ), is a state in the south-east of Germany. With an area of , Bavaria is the largest German state by land area, comprising roughly a fifth of the total lan ...
.Bernhard, William, L., Birge, June Rossbach Bingham, Loeb, John L., Jr.. '' Lots of Lehmans – The Family of Mayer Lehman of Lehman Brothers, Remembered by His Descendants''.
Center For Jewish History
The Center for Jewish History is a partnership of five Jewish history, scholarship, and art organizations in New York City: American Jewish Historical Society, American Sephardi Federation, Leo Baeck Institute New York, Yeshiva University Museu ...
, 2007, page 1 He settled in
Montgomery, Alabama
Montgomery is the capital city of the U.S. state of Alabama and the county seat of Montgomery County. Named for the Irish soldier Richard Montgomery, it stands beside the Alabama River, on the coastal Plain of the Gulf of Mexico. In the 202 ...
, where he opened a dry-goods store, "H. Lehman".Wechsberg, Joseph. ''The Merchant Bankers''. Pocket Books, 1966, page 233 In 1847, following the arrival of his brother
Emanuel Lehman
Emanuel Lehman (born Mendel Lehmann; February 15, 1827 – January 10, 1907) was a German-born American banker. The younger brother of Henry Lehman, he was a co-founder of Lehman Brothers.
Biography
Emanuel Lehman was born in Rimpar, Bavaria o ...
, the firm became "H. Lehman and Bro."Bernhard, William, L., Birge, June Rossbach Bingham, Loeb, John L., Jr.. '' Lots of Lehmans – The Family of Mayer Lehman of Lehman Brothers, Remembered by His Descendants''. Center For Jewish History, 2007, page 5 With the arrival of their youngest brother,
Mayer Lehman
Mayer Lehman (January 9, 1830 – June 21, 1897) was a German-born American businessman, banker, and philanthropist. He was one of the three founding brothers of the investment bank Lehman Brothers.
Early life
Mayer Lehman was born in 1830 to ...
, in 1850, the firm changed its name again and "Lehman Brothers" was founded.Birmingham, Stephen. '' Our Crowd: The Great Jewish Families of New York''. Harper and Row, 1967, page 47
During the 1850s, cotton was one of the most important crops in the United States, and was Alabama's highest-grossing cash crop. Until the U.S. Civil War, nearly all U.S. cotton was produced by
slave labor
Slavery and enslavement are both the state and the condition of being a slave—someone forbidden to quit one's service for an enslaver, and who is treated by the enslaver as property. Slavery typically involves slaves being made to perf ...
, and by the 1860 census, slaves constituted nearly 45% of Alabama's total population. Mayer Lehman was listed as the owner of seven slaves ("three males and four females ranging in age from 5 to 50") in the U.S. Census of 1860.
Capitalizing on cotton's high market value, the three brothers began to routinely accept raw cotton from slave plantations as payment for merchandise, eventually beginning a second business trading in cotton. Within a few years this business grew to become the most significant part of their operation. Following Henry's death from
yellow fever
Yellow fever is a viral disease of typically short duration. In most cases, symptoms include fever, chills, loss of appetite, nausea, muscle pains – particularly in the back – and headaches. Symptoms typically improve within five days. ...
in 1855,Geisst, Charles R. ''The Last Partnerships''.
McGraw-Hill
McGraw Hill is an American educational publishing company and one of the "big three" educational publishers that publishes educational content, software, and services for pre-K through postgraduate education. The company also publishes refere ...
, 1997, page 50 the remaining brothers continued to focus on their commodities-trading/brokerage operations.
By 1858, the center of cotton trading had shifted from the South to New York City, where
factors
Factor, a Latin word meaning "who/which acts", may refer to:
Commerce
* Factor (agent), a person who acts for, notably a mercantile and colonial agent
* Factor (Scotland), a person or firm managing a Scottish estate
* Factors of production, su ...
and commission houses were based. Lehman opened its first branch office at 119 Liberty Street, and 32-year-old Emanuel relocated there to run the office. In 1862, facing difficulties as a result of the
Civil War
A civil war or intrastate war is a war between organized groups within the same state (or country).
The aim of one side may be to take control of the country or a region, to achieve independence for a region, or to change government policies ...
, the firm teamed up with a cotton merchant named John Durr to form Lehman, Durr & Co.Birmingham, Stephen. '' Our Crowd: The Great Jewish Families of New York''. Harper and Row, 1967, page 77Bernhard, William, L., Birge, June Rossbach Bingham, Loeb, John L., Jr.. '' Lots of Lehmans – The Family of Mayer Lehman of Lehman Brothers, Remembered by His Descendants''. Center For Jewish History, 2007, page 8 Following the war the company helped finance Alabama's reconstruction. The firm's headquarters were eventually moved to New York City, where it helped found the
New York Cotton Exchange
The New York Cotton Exchange (NYCE) is a commodities exchange founded in 1870 by a group of one hundred cotton brokers and merchants in New York City. In 1998, the New York Board of Trade (NYBOT) became the parent company of the New York Cotton ...
in 1870, commodifying the crop;Wechsberg, Joseph. ''The Merchant Bankers''. Pocket Books, 1966, page 235 Emanuel sat on the board of governors until 1884. The firm also dealt in the emerging market for railroad bonds and entered the financial-advisory business.
Lehman became a member of the
Coffee Exchange
The Coffee, Sugar and Cocoa Exchange (CSCE) was founded in 1882 as the Coffee Exchange in the City of New York. Sugar futures were added in 1914, and, on September 28, 1979, the New York Coffee and Sugar Exchange merged with the New York Cocoa Exc ...
as early as 1883 and finally the
New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed ...
in 1887. In 1899, it underwrote its first public offering, the preferred and common stock of the
International Steam Pump Company
The Worthington Corporation was a diversified American manufacturer that had its roots in Worthington and Baker, a steam pump manufacturer founded in 1845. In 1967 it merged with Studebaker and Wagner Electric to form Studebaker-Worthington. This ...
.
Despite the offering of International Steam, the firm's real shift from being a commodities house to a house of issue did not begin until 1906. In that year, under Emanuel's son
Philip Lehman
Philip Lehman (November 9, 1861 – March 21, 1947) was an American investment banker.
Biography
Philip Lehman was born in New York City to Emanuel Lehman (1827–1907) and Pauline Sondheim (1843–1871). Emanuel was a co-founder of the now- ...
, the firm partnered with Goldman, Sachs & Co.,Geisst, Charles R. ''The Last Partnerships''. McGraw-Hill, 1997, page 51Geisst, Charles R. ''The Last Partnerships''. McGraw-Hill, 1997, page 285 to bring the General Cigar Co. to market,Wechsberg, Joseph. ''The Merchant Bankers''. Pocket Books, 1966, page 238 followed closely by
Sears, Roebuck and Company
Sears, Roebuck and Co. ( ), commonly known as Sears, is an American chain of department stores founded in 1892 by Richard Warren Sears and Alvah Curtis Roebuck and reincorporated in 1906 by Richard Sears and Julius Rosenwald, with what began ...
. Among these were
F.W. Woolworth Company
The F. W. Woolworth Company (often referred to as Woolworth's or simply Woolworth) was a retail company and one of the pioneers of the five-and-dime store. It was among the most successful American and international five-and-dime businesses, se ...
,Geisst, Charles R. ''The Last Partnerships''. McGraw-Hill, 1997, page 53
May Department Stores Company
The May Department Stores Company was an American department store holding company, formerly headquartered in downtown St. Louis, Missouri. It was founded in Leadville, Colorado, by David May in 1877, moving to St. Louis in 1905. After many ...
Endicott Johnson Corporation
The Endicott-Johnson Shoe Company ("E-J") was a prosperous manufacturer of shoes based in New York's Southern Tier, with factories mostly located in the area's Triple Cities of Binghamton, Johnson City, and Endicott. An estimated 20,000 people ...
.
Following Philip Lehman's retirement in 1925, his son Robert "Bobbie" Lehman took over as head of the firm. During Bobbie's tenure, the company weathered the capital crisis of the Great Depression by focusing on
venture capital
Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to start-up company, startups, early-stage, and emerging companies that have been deemed to have high growth poten ...
while the
equities
In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...
market recovered.
In 1924, John M. Hancock became the first non-family member to join the firm, followed by Monroe C. Gutman and Paul Mazur, who became partners in 1927. By 1928, the firm had moved to its One William Street location.
In the 1930s, Lehman underwrote the
initial public offering
An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...
Radio Corporation of America
The RCA Corporation was a major American electronics company, which was founded as the Radio Corporation of America in 1919. It was initially a patent trust owned by General Electric (GE), Westinghouse, AT&T Corporation and United Fruit Com ...
(RCA). It also helped finance the rapidly growing oil industry, including the companies
Halliburton
Halliburton Company is an American multinational corporation responsible for most of the world's hydraulic fracturing operations. In 2009, it was the world's second largest oil field service company. It has operations in more than 70 countries ...
and
Kerr-McGee
The Kerr-McGee Corporation, founded in 1929, was an American energy company involved in oil exploration, production of crude oil, natural gas, perchlorate and uranium mining and milling in various countries. On June 23, 2006, Anadarko Petroleum ...
. In the 1950s, Lehman underwrote the IPO of
Digital Equipment Corporation
Digital Equipment Corporation (DEC ), using the trademark Digital, was a major American company in the computer industry from the 1960s to the 1990s. The company was co-founded by Ken Olsen and Harlan Anderson in 1957. Olsen was president un ...
. Later, it arranged the acquisition of Digital by
Compaq
Compaq Computer Corporation (sometimes abbreviated to CQ prior to a 2007 rebranding) was an American information technology company founded in 1982 that developed, sold, and supported computers and related products and services. Compaq produced ...
.
An evolving partnership (1969–1984)
Robert Lehman
Robert Owen Lehman, Sr. (September 29, 1891 – August 9, 1969) was an American banker, longtime head of the Lehman Brothers investment bank, and a racehorse owner, art collector, and philanthropist.
Life and career
Lehman was born to a Jewish ...
died in 1969 after 44 years in a leadership position for the firm, leaving no member of the Lehman family actively involved with the partnership. At the same time, Lehman was facing strong headwinds amidst the difficult economic environment of the early 1970s. By 1972, the firm was facing hard times and in 1973,
Pete Peterson
Douglas Brian "Pete" Peterson (born June 26, 1935) is an American politician and diplomat. He served as a United States Air Force pilot during the Vietnam War and spent over six years as a prisoner of the North Vietnamese army after his plane w ...
, chairman and chief executive officer of the
Bell & Howell
Bell and Howell LLC is a U.S.-based services organization and former manufacturer of cameras, lenses, and motion picture machinery, founded in 1907 by two projectionists, and originally headquartered in Wheeling, Illinois. The company is now ...
Corporation, was brought in to save the firm.Geisst, Charles R. ''The Last Partnerships''. McGraw-Hill, 1997, page 77
Under Peterson's leadership as chairman and CEO, the firm acquired Abraham & Co. in 1975, and two years later merged with Kuhn, Loeb & Co., to form
Lehman Brothers, Kuhn, Loeb Inc.
Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, a ...
, the country's fourth-largest investment bank, behind
Salomon Brothers
Salomon Brothers, Inc., was an American multinational bulge bracket investment bank headquartered in New York. It was one of the five largest investment banking enterprises in the United States and the most profitable firm on Wall Street durin ...
First Boston : ''For the company after its acquisition by Credit Suisse, see Credit Suisse First Boston (known as CSFB and CS First Boston)''
The First Boston Corporation was a New York-based bulge bracket investment bank, founded in 1932 and acquired by Cred ...
. Peterson led the firm from significant operating losses to five consecutive years of record profits with a
return on equity
The return on equity (ROE) is a measure of the profitability of a business in relation to the equity. Because shareholder's equity can be calculated by taking all assets and subtracting all liabilities, ROE can also be thought of as a return on ''a ...
among the highest in the investment-banking industry.
By the early 1980s, hostilities between the firm's
investment banker
Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated with ...
Lewis Glucksman
Lewis L. Glucksman (December 22, 1925 – July 5, 2006) was a former Lehman Brothers trader and former chief executive officer and chairman of Lehman Brothers, Kuhn, Loeb Inc.
Early life and education
Glucksman was born into a second generati ...
, the firm's President, COO and former trader, to be his co-CEO in May 1983. Glucksman introduced a number of changes that had the effect of increasing tensions, which when coupled with Glucksman’s management style and a downturn in the markets, resulted in a power struggle that ousted Peterson and left Glucksman as the sole CEO.Geisst, Charles R. ''The Last Partnerships''. McGraw-Hill, 1997, page 78
Upset bankers, who had soured over the power struggle, left the company. Stephen A. Schwarzman, chairman of the firm's M&A committee, recalled in a February 2003 interview with ''
Private Equity International
''Private Equity International'' (PEI) is a global insight, analysis and data provider for the private equity industry, with a core focus on the relationship between investors and fund managers: the LP-GP nexus.
Launched in December 2001, the tit ...
'' that "Lehman Brothers had an extremely competitive internal environment, which ultimately became dysfunctional." The company suffered under the disintegration, and Glucksman was pressured into selling the firm.
Merger with American Express (1984–1994)
Shearson/American Express, an American Express-owned securities company focused on brokerage rather than investment banking, acquired Lehman in 1984, for $360 million. On May 11, the combined firms became Shearson Lehman/American Express.
From 1983 to 1990, Peter A. Cohen was CEO and chairman of Shearson Lehman Brothers, where he led the $1 billion purchase of
E.F. Hutton
EF Hutton was an American brokerage firm, stock brokerage firm founded in 1904 by Edward Francis Hutton and his brother, Franklyn Laws Hutton. Later, it was led by well known Wall Street trader Gerald M. Loeb. Under their leadership, EF Hutton b ...
to form
Shearson Lehman Hutton
Shearson was the name of a series of investment banking and retail brokerage firms from 1902 until 1994, named for Edward Shearson In 1989, Shearson backed F. Ross Johnson's management team in its attempted management buyout of RJR Nabisco, but were ultimately outbid by private equity firm
Kohlberg Kravis Roberts
KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global investment company that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strate ...
Harvey Golub
Harvey Golub (born April 16, 1939) is an American businessman.
Biography
Born to a Jewish family, Golub attended Cornell University and received a Bachelor of Science from the New York University.
He worked as a senior partner with McKinsey ...
, American Express began to divest itself of its banking and brokerage operations. It sold its retail brokerage and asset management operations to
Primerica
Primerica, Inc. (NYSE: PRI) is a company that provides insurance, investment and financial services to middle income families in the United States and Canada.
Primerica is the parent company of National Benefit Life Insurance Company, Prime ...
and in 1994 it spun off Lehman Brothers Kuhn Loeb in an
initial public offering
An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...
, as Lehman Brothers Holdings, Inc.Geisst, Charles R. ''The Last Partnerships''. McGraw-Hill, 1997, page 79 After being spun off, Dick Fuld became CEO of the company. Fuld steered Lehman through the 1997 Asian Financial Crisis, and when the
Long Term Capital Management
Long-Term Capital Management L.P. (LTCM) was a highly-leveraged hedge fund. In 1998, it received a $3.6 billion bailout from a group of 14 banks, in a deal brokered and put together by the Federal Reserve Bank of New York.
LTCM was founded in ...
hedge fund collapsed in 1998.
In 2001, the firm acquired the private-client services, or "PCS", business of Cowen & Co. and later, in 2003, aggressively re-entered the asset-management business, which it had exited in 1989. Beginning with $2 billion in assets under management, the firm acquired the Crossroads Group, the fixed-income division of Lincoln Capital Management and
Neuberger Berman
Neuberger Berman Group LLC is a private, independent, employee-owned investment management firm. The firm manages equities, fixed income, private equity and hedge fund portfolios for global institutional investors, advisors and high-net-wort ...
. These businesses, together with the PCS business and Lehman's private-equity business, comprised the Investment Management Division, which generated approximately $3.1 billion in net revenue.
During the subprime mortgage crisis, Fuld kept his job while CEOs of rivals like
Bear Stearns
The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The comp ...
, Merrill Lynch, and Citigroup were forced to resign. In addition, Lehman's board of directors, which included retired CEOs like
Vodafone
Vodafone Group plc () is a British multinational telecommunications company. Its registered office and global headquarters are in Newbury, Berkshire, England. It predominantly operates services in Asia, Africa, Europe, and Oceania.
, Vod ...
John Akers
John Fellows Akers (December 28, 1934 – August 22, 2014) was an American businessman. He was president (1983-1989), chief executive officer (1985-1993) and chairman (1986-1993) of IBM.
Education
Akers attended Yale, and while there became a bro ...
were reluctant to challenge Fuld as the firm's share price spiraled lower.
In May 2008, prior to going bankrupt, the firm had $639 billion in assets.
Response to September 11, 2001 attacks
On September 11, 2001, Lehman occupied three floors (38-40) of
1 World Trade Center
One World Trade Center (also known as One World Trade, One WTC, and formerly Freedom Tower) is the main building of the rebuilt World Trade Center complex in Lower Manhattan, New York City. Designed by David Childs of Skidmore, Owings & M ...
, where one of its employees was killed in the terrorist attacks of that day. Its global headquarters in Three World Financial Center were severely damaged and rendered unusable by falling debris, displacing over 6,500 employees. Trading operations moved to Jersey City,
New Jersey
New Jersey is a state in the Mid-Atlantic and Northeastern regions of the United States. It is bordered on the north and east by the state of New York; on the east, southeast, and south by the Atlantic Ocean; on the west by the Delaware ...
. When stock markets reopened on September 17, 2001, Lehman's sales and trading capabilities were restored.
In the ensuing months, the firm spread its operations across New York City in over 40 temporary locations. The investment-banking division converted the first-floor lounges, restaurants, and all 665 guest rooms of the Sheraton Manhattan Hotel into office space.
The bank also experimented with
flextime
Flextime (also spelled flexitime ( BE) or flex-time) is a flexible hours schedule that allows workers to alter their workday and decide/adjust their start and finish times. In contrast to traditional work arrangements that require employees to w ...
virtual private networking
A virtual private network (VPN) extends a private network across a public network and enables users to send and receive data across shared or public networks as if their computing devices were directly connected to the private network. The be ...
after the attacks. In October 2001, Lehman purchased a 32-story, office building for a reported sum of $700 million. The building, located at 745 Seventh Avenue, had recently been completed, and not yet occupied, by rival
Morgan Stanley
Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
. Lehman began moving into the new facility in January and finished in March 2002. The firm did not return to Three World Financial Center as its structural integrity had not been given a clean bill of health, and the company could not have waited for repairs to Three World Financial Center to conclude.
After the attacks, Lehman's management placed increased emphasis on
business continuity planning
Business continuity may be defined as "the capability of an organization to continue the delivery of products or services at pre-defined acceptable levels following a disruptive incident", and business continuity planning (or business continuity a ...
. Aside from its headquarters in Three World Financial Center, Lehman maintained operations-and-backoffice facilities in Jersey City, space that the firm considered leaving prior to 9/11. The space was not only retained, but expanded, including the construction of a backup-trading facility.
June 2003 SEC litigation
In June 2003, the company was one of ten firms which simultaneously entered into a settlement with the
U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
(SEC), the Office of the New York State Attorney General and various other securities regulators, regarding undue influence over each firm's research analysts by its investment-banking divisions. Regulators alleged that the firms had improperly associated analyst compensation with the firms' investment-banking revenues, and promised favorable, market-moving research coverage, in exchange for underwriting opportunities. The settlement, known as the "global settlement", provided for total financial penalties of $1.4 billion, including $80 million against Lehman, and structural reforms including a complete separation of investment banking departments from research departments, no analyst compensation, directly or indirectly, from investment-banking revenues, and the provision of free, independent, third-party, research to the firms' clients.
Rise of mortgage origination (1997–2006)
Lehman was one of the first Wall Street firms to move into the business of
mortgage origination
In consumer lending, mortgage origination, a specialized subset of loan origination, is the process by which a lender works with a borrower to complete a mortgage transaction, resulting in a mortgage loan. A mortgage loan is a loan in which pr ...
. In 1997, Lehman bought Colorado-based lender, Aurora Loan Services, an
Alt-A An Alt-A mortgage, short for Alternative A-paper, is a type of U.S. mortgage that, for various reasons, is considered riskier than A-paper, or "prime", and less risky than " subprime," the riskiest category. For these reasons, as well as in some c ...
lender. In 2000, to expand their mortgage origination pipeline, Lehman purchased West Coast subprime mortgage lender BNC Mortgage LLC. Lehman quickly became a force in the subprime market. By 2003 Lehman made $18.2 billion in loans and ranked third in lending. By 2004, this number topped $40 billion. By 2006, Aurora and BNC were lending almost $50 billion per month. By 2008, Lehman had assets of $680 billion supported by only $22.5 billion of firm capital. From an equity position, its risky commercial real estate holdings were thirty times greater than capital. In such a highly leveraged structure, a 3 to 5 percent decline in real estate values would wipe out all capital.
Collapse
Causes
Malfeasance
A March 2010 report by the court appointed examiner indicated that Lehman executives regularly used cosmetic accounting gimmicks at the end of each quarter to make its finances appear less shaky than they really were. This practice was a type of
repurchase agreement
A repurchase agreement, also known as a repo, RP, or sale and repurchase agreement, is a form of short-term borrowing, mainly in government securities. The dealer sells the underlying security to investors and, by agreement between the two pa ...
that temporarily removed securities from the company's
balance sheet
In financial accounting, a balance sheet (also known as statement of financial position or statement of financial condition) is a summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a Partnersh ...
. However, unlike typical repurchase agreements, these deals were described by Lehman as the outright sale of securities and created "a materially misleading picture of the firm’s financial condition in late 2007 and 2008."
Subprime mortgage crisis
In August 2007, the firm closed its subprime lender, BNC Mortgage, eliminating 1,200 positions in 23 locations, and took an after-tax charge of $25 million and a $27 million reduction in goodwill. Lehman said that poor market conditions in the mortgage space "necessitated a substantial reduction in its resources and capacity in the subprime space."
In September 2007, Joe Gregory appointed Erin Callan as CFO. On March 16, 2008, after rival
Bear Stearns
The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The comp ...
was taken over by
JP Morgan Chase
JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City and incorporated in Delaware. As of 2022, JPMorgan Chase is the largest bank in the United States, the w ...
in a
fire sale
A fire sale is the sale of goods at extremely discounted prices. The term originated in reference to the sale of goods at a heavy discount due to fire damage. It may or may not be defined as a closeout, the final sale of goods to zero inventor ...
, market analysts suggested that Lehman would be the next major investment bank to fall. Callan fielded Lehman's first quarter conference call, where the firm posted a profit of $489 million, compared to Citigroup's $5.1 billion and Merrill Lynch's $1.97 billion losses which was Lehman’s 55th consecutive profitable quarter. The firm's stock price leapt 46 percent after that announcement.
In 2008, Lehman faced an unprecedented loss to the continuing subprime mortgage crisis. Lehman's loss was a result of having held on to large positions in subprime and other lower-rated mortgage
tranche
In structured finance, a tranche is one of a number of related securities offered as part of the same transaction. In the financial sense of the word, each bond is a different slice of the deal's risk. Transaction documentation (see indenture) ...
s when securitizing the underlying mortgages; it is unclear whether Lehman was simply unable to sell the lower-rated bonds or voluntarily kept them. 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.
On June 9, 2008, Lehman Brothers announced US$2.8 billion second-quarter loss, its first since being spun off from American Express, as market volatility rendered many of its hedges ineffective during that time. Lehman also reported that it had raised a further $6 billion in capital. As a result, there was major management shakeup, in which Hugh "Skip" McGee III (head of investment banking) held a meeting with senior staff to strip CEO Richard Fuld and his lieutenants of their authority. Consequently, Joe Gregory agreed to resign as president and COO, and afterward he told Erin Callan that she had to resign as CFO. Callan was appointed CFO of Lehman in 2008 but served only for six months, before departing after her mentor Joe Gregory was demoted. Bart McDade was named to succeed Gregory as president and COO, when several senior executives threatened to leave if he was not promoted. McDade took charge and brought back Michael Gelband and Alex Kirk, who had previously been pushed out of the firm by Gregory for not taking risks. Although Fuld remained CEO, he soon became isolated from McDade's team.
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 week) on reports that the state-controlled
Korea Development Bank
Korea Development Bank (KDB Bank, SWIFT: KODBKRSE) is a wholly state-owned policy development bank in South Korea. It was founded in 1954 in accordance with The Korea Development Bank Act to finance and manage major industrial projects to expedit ...
was considering buying the bank. Most of those gains were quickly eroded as news came in that Korea Development Bank was "facing difficulties pleasing regulators and attracting partners for the deal."
On September 9, Lehman's shares plunged 45% to $7.79, after it was reported that the state-run South Korean firm had put talks on hold. Investor confidence continued to erode as Lehman's stock lost roughly half its value and pushed the
S&P 500
The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. As of ...
down 3.4% on September 9. The Dow Jones lost 300 points the same day on investors' concerns about the security of the bank. The U.S. government did not announce any plans to assist with any possible financial crisis that emerged at Lehman.
The next day, Lehman announced a loss of $3.9 billion and its intent to sell off a majority stake in its investment-management business, which included
Neuberger Berman
Neuberger Berman Group LLC is a private, independent, employee-owned investment management firm. The firm manages equities, fixed income, private equity and hedge fund portfolios for global institutional investors, advisors and high-net-wort ...
. The stock slid seven percent that day. Lehman, after earlier rejecting questions on the sale of the company, was reportedly searching for a buyer as its stock price dropped another 40 percent on September 11, 2008.
Just before the collapse of Lehman Brothers, executives at Neuberger Berman sent e-mail memos suggesting, among other things, that the Lehman Brothers' top people forgo multimillion-dollar bonuses to "send a strong message to both employees and investors that management is not shirking accountability for recent performance." Lehman Brothers Investment Management Director George Herbert Walker IV dismissed the proposal, going so far as to actually apologize to other members of the Lehman Brothers executive committee for the idea having been suggested. He wrote, "Sorry team. I am not sure what's in the water at Neuberger Berman. I'm embarrassed and I apologize."
Short-selling allegations
During hearings on the bankruptcy filing by Lehman Brothers and bailout of
AIG
American International Group, Inc. (AIG) is an American multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions. , AIG companies employed 49,600 people.https://www.aig.com/content/dam/aig/amer ...
before the House Committee on Oversight and Government Reform, former Lehman Brothers CEO
Richard Fuld
Richard Severin Fuld Jr. (born April 26, 1946) is an American banker best known as the final chairman and chief executive officer of investment bank Lehman Brothers. Fuld held this position from the firm's 1994 spinoff from American Express unti ...
said a host of factors including a crisis of confidence and naked short-selling attacks followed by false rumors contributed to both the collapse of Bear Stearns and Lehman Brothers. House committee Chairman
Henry Waxman
Henry Arnold Waxman (born September 12, 1939) is an American politician who served as a U.S. representative from California from 1975 to 2015. He is a member of the Democratic Party.
His district included much of the western part of the city of ...
said the committee received thousands of pages of internal documents from Lehman and these documents portray a company in which there was "no accountability for failure".
An article by journalist
Matt Taibbi
Matthew Colin Taibbi (; born March 2, 1970) is an American author, journalist, and podcaster. He has reported on finance, media, politics, and sports. A former contributing editor for ''Rolling Stone'', he is an author of several books, co-host o ...
in ''
Rolling Stone
''Rolling Stone'' is an American monthly magazine that focuses on music, politics, and popular culture. It was founded in San Francisco, California, in 1967 by Jann Wenner, and the music critic Ralph J. Gleason. It was first known for its ...
'' contended that naked short selling contributed to the demise of both Lehman and
Bear Stearns
The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The comp ...
. A study by finance researchers at the
University of Oklahoma
, mottoeng = "For the benefit of the Citizen and the State"
, type = Public research university
, established =
, academic_affiliations =
, endowment = $2.7billion (2021)
, pr ...
Price College of Business studied trading in financial stocks, including Lehman Brothers and Bear Stearns, and found "no evidence that stock price declines were caused by naked short selling".
Bankruptcy
On Saturday, September 13, 2008, Timothy F. Geithner, then the president of the Federal Reserve Bank of New York, called a meeting on the future of Lehman, which included the possibility of an emergency liquidation of its assets. Lehman reported that it had been in talks with
Bank of America
The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. The bank ...
and Barclays for the company's possible sale; however, both Barclays and Bank of America ultimately declined to purchase the entire company, in the former case because the British government (in particular, the Chancellor of the Exchequer
Alastair Darling
Alistair Maclean Darling, Baron Darling of Roulanish, (born 28 November 1953) is a British politician who served as Chancellor of the Exchequer under Prime Minister Gordon Brown from 2007 to 2010. A member of the Labour Party, he was a Member ...
Hector Sants
Sir Hector William Hepburn Sants (born 15 December 1955) is a British investment banker. He was appointed Chief Executive Officer of the Financial Services Authority in July 2007 and stepped down in June 2012. He took up a new position with Ba ...
) refused to allow the transaction at the last minute, quoting stockholder regulations in the UK, despite a deal having apparently been completed.
The next day, Sunday, September 14, the
International Swaps and Derivatives Association
International is an adjective (also used as a noun) meaning "between nations".
International may also refer to:
Music Albums
* ''International'' (Kevin Michael album), 2011
* ''International'' (New Order album), 2002
* ''International'' (The T ...
(ISDA) offered an exceptional trading session to allow market participants to offset positions in various derivatives on the condition of a Lehman bankruptcy later that day. Although the bankruptcy filing missed the deadline, many dealers honored the trades they made in the special session.
Shortly before 1 am Monday morning (UTC−5), Lehman Brothers Holdings announced it would
file
File or filing may refer to:
Mechanical tools and processes
* File (tool), a tool used to ''remove'' fine amounts of material from a workpiece
**Filing (metalworking), a material removal process in manufacturing
** Nail file, a tool used to gent ...
for
Chapter 11 bankruptcy protection
Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, whet ...
citing bank debt of $613 billion, $155 billion in bond debt, and assets worth $639 billion. It further announced that its subsidiaries would continue to operate as normal. A group of Wall Street firms agreed to provide capital and financial assistance for the bank's orderly liquidation and the Federal Reserve, in turn, agreed to a swap of lower-quality assets in exchange for loans and other assistance from the government. The morning witnessed scenes of Lehman employees removing files, items with the company logo, and other belongings from the world headquarters at 745 Seventh Avenue. The spectacle continued throughout the day and into the following day.
Brian Marsal, co-chief executive of the restructuring firm
Alvarez and Marsal
Alvarez & Marsal (A&M) is a global professional services firm notable for its work in turnaround management and performance improvement of a number of large, high-profile businesses both in the US and abroad such as Lehman Brothers, HealthSouth, T ...
was appointed as
Chief restructuring officer
A chief restructuring officer (CRO) is a senior officer of a company given broad powers to renegotiate all aspects of a company's finances to deal with an impending bankruptcy or to restructure a company following a bankruptcy filing. The use of CR ...
and subsequently Chief executive officer of the company.
Later that day, the Australian Securities Exchange (ASX) suspended Lehman's Australian subsidiary as a market participant after clearing-houses terminated contracts with the firm. Lehman shares tumbled over 90% on September 15, 2008. The Dow Jones closed down just over 500 points on September 15, 2008, which was at the time the largest drop in a single day since the days following the attacks on September 11, 2001.
In the United Kingdom, the investment bank went to
administration
Administration may refer to:
Management of organizations
* Management, the act of directing people towards accomplishing a goal
** Administrative Assistant, traditionally known as a Secretary, or also known as an administrative officer, admini ...
with
PricewaterhouseCoopers
PricewaterhouseCoopers is an international professional services brand of firms, operating as partnerships under the PwC brand. It is the second-largest professional services network in the world and is considered one of the Big Four accounti ...
appointed as administrators. In Japan, the Japanese branch, Lehman Brothers Japan Inc., and its holding company filed for civil reorganization on September 16, 2008, in Tokyo District Court. On September 17, 2008, the New York Stock Exchange delisted Lehman Brothers.
On March 16, 2011 some three years after filing for bankruptcy and following a filing in a Manhattan U.S. bankruptcy court, Lehman Brothers Holdings Inc announced it would seek creditor approval of its reorganization plan by October 14 followed by a confirmation hearing to follow on November 17.
Liquidation
Barclays acquisition
On September 16, 2008, Barclays PLC announced that they would acquire a "stripped clean" portion of Lehman for $1.75 billion, including most of Lehman's North America operations. On September 20, 2008, a revised version of the deal, a $1.35 billion (£700 million) plan for Barclays to acquire the core business of Lehman (mainly its $960-million headquarters, a 38-story office building in Midtown Manhattan, with responsibility for 9,000 former employees), was approved. Manhattan court bankruptcy Judge James Peck, after a 7-hour hearing, ruled:
"I have to approve this transaction because it is the only available transaction. Lehman Brothers became a victim, in effect the only true icon to fall in a tsunami that has befallen the credit markets. This is the most momentous bankruptcy hearing I've ever sat through. It can never be deemed precedent for future cases. It's hard for me to imagine a similar emergency."
Luc Despins, then a partner at Milbank, Tweed, Hadley & McCloy, the creditors committee counsel, said: "The reason we're not objecting is really based on the lack of a viable alternative. We did not support the transaction because there had not been enough time to properly review it." In the amended agreement, Barclays would absorb $47.4 billion in securities and assume $45.5 billion in trading liabilities. Lehman's attorney Harvey R. Miller of Weil, Gotshal & Manges, said "the purchase price for the real estate components of the deal would be $1.29 billion, including $960 million for Lehman's New York headquarters and $330 million for two New Jersey data centers. Lehman's original estimate valued its headquarters at $1.02 billion but an appraisal from CB Richard Ellis this week valued it at $900 million." Barclays were not to acquire Lehman's Eagle Energy unit, but to have entities known as Lehman Brothers Canada Inc, Lehman Brothers Sudamerica, Lehman Brothers Uruguay and its Private Investment Management business for high-net-worth individuals. Finally, Lehman would retain $20 billion of securities assets in Lehman Brothers Inc that are not being transferred to Barclays. Barclays acquired a potential liability of $2.5 billion to be paid as Severance package, severance, if it chooses not to retain some Lehman employees beyond the guaranteed 90 days.
Nomura acquisition
Nomura Holdings
is a Japanese financial holding company and a principal member of the Nomura Group. It, along with its broker-dealer, banking and other financial services subsidiaries, provides investment, financing and related services to individual, institut ...
, Japan's top brokerage firm, agreed to buy the Asian division of Lehman Brothers for $225 million and parts of the European division for a nominal fee of $2. It would not take on any trading assets or liabilities in the European units. Nomura negotiated such a low price because it acquired only Lehman's employees in the regions, and not its stocks, bonds or other assets. The last Lehman Brothers Annual Report identified that these non-US subsidiaries of Lehman Brothers were responsible for over 50% of global revenue produced.
Sale of asset management businesses
On September 29, 2008, Lehman agreed to sell Neuberger Berman, part of its investment management business, to a pair of private-equity firms, Bain Capital Partners and Hellman & Friedman, for $2.15 billion. The transaction was expected to close in early 2009, subject to approval by the U.S. Bankruptcy Court, but a competing bid was entered by the firm's management, who ultimately prevailed in a bankruptcy auction on December 3, 2008. Creditors of Lehman Brothers Holdings Inc. retain a 49% common equity interest in the firm, now known as Neuberger Berman Group LLC.
In Europe, the Quantitative Asset Management Business has been acquired back by its employees on November 13, 2008 and has been renamed back to TOBAM.
Financial fallout
Lehman's bankruptcy was the largest failure of an investment bank since Drexel Burnham Lambert collapsed in 1990 amid fraud allegations. Immediately following the bankruptcy filing, an already distressed financial market began a period of extreme volatility, during which the Dow experienced its largest one day point loss, largest intra-day range (more than 1,000 points) and largest daily point gain. What followed was what many have called the "perfect storm" of economic distress factors and eventually a $700bn bailout package (Troubled Asset Relief Program) prepared by Henry Paulson, US Secretary of the Treasury, Secretary of the Treasury, and approved by Congress. The Dow eventually closed at a new six-year low of 7,552.29 on November 20, followed by a further drop to 6626 by March of the next year.
The fall of Lehman also had a strong effect on small private investors such as bond holders and holders of so-called Minibonds. In Germany, structured products, often based on an index, were sold mostly to private investors, elderly, retired persons, students and families. Most of those now worthless derivatives were sold by the German arm of Citigroup, the German Citibank now owned by Crédit Mutuel.
Ongoing litigation
On March 11, 2010, Anton R. Valukas, a court-appointed examiner, published the results of its year-long investigation into the finances of Lehman Brothers. Report of Anton R. Valukas, This report revealed that Lehman Brothers used an accounting procedure termed repo 105 to temporarily exchange $50 billion of assets into cash just before publishing its financial statements. The action could be seen to implicate both Ernst & Young, the bank's accountancy firm and Richard S. Fuld, Jr, the former CEO. This could potentially lead to Ernst & Young being found guilty of financial malpractice and Fuld facing time in prison.
According to ''The Wall Street Journal'', in March 2011, the SEC announced that they weren't confident that they could prove that Lehman Brothers violated US laws in its accounting practices.
In October 2011 the administrators of Lehman Brothers Holding Inc. lost their appeal to overturn a court order forcing them to pay £148 million into their underfunded pensions plan.
As of January 2016, Lehman paid more than $105 billion to its unsecured creditors. In addition, JPMorgan will pay $1.42 billion in cash to settle a lawsuit accusing JPMorgan of draining Lehman Brothers liquidity right before the crash. The settlement would permit another $1.496 billion to be paid to creditors and a separate $76 million deposit.
Merger and acquisition history
The following is an illustration of the company's major mergers and acquisitions and historical predecessors (this is not a comprehensive list):"Salomon Smith Barney" from Gambee, Robert. Wall Street '. W. W. Norton & Company, 1999. p.73
Former officers
* Richard S. Fuld Jr.
* Scott J. Freidheim
* Bart McDade
* Joe Gregory
* Ian Lowitt, chief financial officer at the time of Lehman's collapse
* Jessie Bhattal
* Jeremy Isaacs (not Sir Jeremy Isaacs, the British television producer and executive)
* Hugh "Skip" McGee III, Hugh McGee
* George Herbert Walker IV
* Frederick M. Warburg
* Michael Gelband
* Joseph Rosenberg
In popular culture
The events of the weekend leading up to Lehman's bankruptcy are dramatized in the 2009 BBC television film ''The Last Days of Lehman Brothers''.
In the 2010 animated film ''Despicable Me (film), Despicable Me'', the main character Gru visits the Bank of Evil, which funds all evil plots for villains around the world and has a sign reading "Formerly Lehman Brothers".
The 2011 drama film ''Margin Call (film), Margin Call'' focuses on the events of a 24-hour period at a large investment bank based on amalgam of investment banks, drawing heavily from the culture of Lehman Brothers. However, the events in the film are primarily a depiction of the actions of Goldman Sachs.
The 2011 HBO film ''Too Big to Fail (film), Too Big to Fail'' recounts the days before Lehman Brothers declared bankruptcy and the fallout afterward.
The 2011 film ''Horrible Bosses'' features a character by the name of Kenny Sommerfield (played by P. J. Byrne) who worked at Lehman Brothers till its bankruptcy, ending up broke.
The fall of Lehman Brothers is depicted in the 2015 film ''The Big Short (film), The Big Short'', where two of the characters walk around the Lehman Brothers offices after the bankruptcy to see the main trading floor.
In Imbolo Mbue's 2016 debut novel ''Behold the Dreamers'', an immigrant from Cameroon is a chauffeur for Clark Edwards, an executive at Lehman Brothers.
In the 2016 animated film ''Zootopia'', there is a brief appearance of a bank called Lemming Brothers, which is staffed by lemmings.
''The Lehman Trilogy'' is a three-act play by Italian dramatist Stefano Massini about the history of the Lehman Brothers.
In the 2019 Showtime (TV network), Showtime comedy series ''Black Monday (TV series), Black Monday'', a fictionalized version of Lehman Brothers with an altered spelling is central to the plot and represented by brothers Larry & Lenny Leighman.
Principal locations (first year of occupancy)
* 17 Court Square, Montgomery, Alabama (1847)*Lehman Brothers. A Centennial – Lehman Brothers 1850–1950. Spiral Press, 1950, pages 62–63
* 119 Liberty Street, New York, NY (1858)
* 176 Fulton Street, New York, NY (1865–1866?)
* 133–35 Pearl Street, New York, NY (1867)
* 40 Exchange Place, New York, NY (1876)
* 16 William Street, New York, NY (1892)
* One William Street, New York, NY (1928) **
* 55 Water Street (1980) ***
* 200 Vesey Street, 3 World Financial Center (1985)
* 745 Seventh Avenue, New York, NY (2002)* Henry Lehman established his first store location on Commerce Street, in Montgomery, in 1845. In 1848, one year after Emanuel's arrival, the brothers moved "H. Lehman & Bro." to 17 Court Square, where it remained when Mayer arrived in 1850, forming "Lehman Brothers". ** Designated as a landmark by the New York City Landmarks Preservation Committee in 1996. *** Sales and trading personnel had been in this location since 1977; they were joined by the firm's investment bankers and brokers in 1980.
See also
*Lehman Brothers Treasury
*MF Global, the largest Wall Street firm to collapse, as it did in 2011, since the Lehman Brothers debacle in September 2008.
*Valukas Report on the failure of Lehman
*Bankruptcy in the United States
References
Further reading
* Auletta, Ken. ''Greed and Glory on Wall Street: The Fall of the House of Lehman''. Random House, 1985
* Bernhard, William, L., Birge, June Rossbach Bingham, Loeb, John L., Jr. ''Lots of Lehmans: The Family of Mayer Lehman of Lehman Brothers, Remembered by His Descendants''. Center for Jewish History, 2007.
* Birmingham, Stephen. '' Our Crowd: The Great Jewish Families of New York''. Harper and Row, 1967.
* Dillian, Jared ''Street Freak: Money and Madness at Lehman Brothers: A Memoir'' New York: Simon and Schuster, September 13, 2011.
* Geisst, Charles R. ''The Last Partnerships''. McGraw-Hill, 1997
* Shirkhedkar, Jayant. ''Saving Lehman, One person at a time''. McGraw-Hill, 2007
* Lehman Brothers. ''A Centennial – Lehman Brothers 1850–1950''. Spiral Press, 1950
* Schack, Justin (May 2005). "Restoring the House of Lehman". ''Institutional Investor'', p. 24–32.
* Wechsberg, Joseph. ''The Merchant Bankers''. Pocket Books, 1968
*
* Lawrence, G. McDonald. (2009) ''A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers''. Crown Business
* Sorkin, A. Ross (2009). ''Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves''. Viking Adult
* Kane and Stollery (2013). "Lessons learned: an exchange of view".
*
* Kane and Stollery (2018). "5 years on: what have we learned: an exchange of views".
External links
* Lehman Brothers Records at Baker Library/Bloomberg Center Historical Collections, Harvard Business School Lehman Brothers - Barclays Archives: Lehman Brothers' Hong Kong incorporated entities - KPMG Hong Kong Lehman Brothers bankruptcy site linked to from Lehman Brothers' home page The Lehman Brothers Treasure Trove – slideshow by ''Life magazine''
*
*
{{Authority control
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Banks established in 1850
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Banks disestablished in 2008
Former investment banks of the United States
Companies formerly listed on the New York Stock Exchange
Companies that filed for Chapter 11 bankruptcy in 2008
Defunct banks of the United States
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History of Montgomery, Alabama
Shearson Lehman/American Express
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Nomura Holdings
American companies disestablished in 2008