Lehman Brothers: The Fall from Grace
Dr Viola Makin, Amanda Bowen and Chijioke Oji
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Wits Business School, University of the Witwatersrand
Ethics, Finance, Banking
On 15 September 2008, Lehman Brothers Holdings Inc. filed for bankruptcy protection at the United States Bankruptcy Court in Manhattan, New York. The news of Lehman’s bankruptcy filing sent shockwaves through the United States (US) financial markets, the impact of which was later felt across the world, contributing to the global financial crisis in the same year. As a major American financial institution, Lehman held US$639 billion in assets at the time of its demise, making its bankruptcy filing the largest in the history of the US. Once looked upon as “too big to fail” by financial analysts, a combination of misjudged calculations in subprime lending and commercial mortgage-related investments, coupled with the quest to increase profitability, resulted in the collapse of the bank.