Lehman Brothers Case Study

At present, a corporate socially responsible approach to business activities is now more important within the financial services sector than ever before. Under the corporate social responsibilities, there have five groups of stakeholders are most important in it. They include suppliers, customers, employees, community and shareholders (1). When a company is getting bigger and bigger, its impact is not only in its own country but more likely to affect the world, so it should be educated to make corporate more understandable to corporate socially responsible, plus pressure groups to look after the issues, thus forming competitive advantage.

Stakeholder theory focuses on moral, ethics and responsibility in the society. There should be no market

Its principal activities include investing in stocks and fixed income sales and trading businesses, research, investment management, private equity and private banking Business. Lehman not only invest in subprime products, but also invest in credit default swaps (i.e., mini-bonds), is a derivative product, rather than bonds. After the issue by the multinational sale, some banks in order to obtain commissions, will these products be sold to non-professional investors such as retirees, elders, etc. Since customers generally do not read the relevant clauses, they think that mini-bonds, like ordinary bonds, are low-risk and high-interest-guaranteed products. In 2007, the company Lehman's stock dropped sharply as a result of the failure of hedge funds and the deteriorating mortgage-backed securities portfolio, with Lehman officially declaring bankruptcy in 2008.

However, in a police raid investigation, it was found that it was a Ponzi scheme and the company immediately seized, so that some Chinese investors who participated in the company are asking for the funds to be recovered. After the investigation, Ezubao raised more than 50 billion yuan and injured about 900,000 investors. In fact, top management buys businesses or registers through the company Shell companies, etc., fictitious investment projects on the platform, most of the projects are fake. After the incident, the China Banking Regulatory Commission drafted the "Management Law", which mainly targets acts banned by online lending institutions and clarifies the division of supervision between departments. It reminds investors and lending platform users to beware of encountering frauds themselves. When the type of events is found, investors' confidence will be greatly reduced, the financial institutions will no longer be trusted, the reputation will be damaged, and the social economy will be even more directly