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Case Study Lehman Brothers

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A Case Study of the Lehman Brothers Bankruptcy

Introduction
In year 2008, financial crisis had led to the collapse of many banks in United States. Lehman Brothers was one of the banks that had filed for its bankruptcy on 15 September 2008. It was the biggest bankruptcy in the history and it is still for now. Being the fourth largest investment bank in United States that had been set up 158 years ago, its failure had conveyed a major impact to the world financial markets.
The aim of this case study was to establish an overview of the risks incorporated in Lehman Brothers’ business, how the financial crisis affected the bank and finally led to their bankruptcy. Moreover, to analyze the risks and give a recommendation of a more sustainable risk approach.

Background
The Lehman Brothers was founded by German immigrant Henry Lehman and his brothers in 1850s. For the first decades the company traded cotton, however in the beginning of the 20th century it started with banking and securities trading, eventually becoming an investment bank. Investing and doing business in growing sectors of the 20th century as well as going global and acquiring other firms, Lehman Brothers expanded and became one of the world’s largest investment banks.
The main business areas of Lehman before the collapse was typical investment banking as well as equities, fixed income, capital markets and investment management. Their investment banking business provided financial services such as mergers and

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