Defunct investment bank Lehman Brothers moved into its final chapter Tuesday, but it will take years before the 161-year-old financial firm will close the book on its storied history.
Lehman Brothers' bankruptcy is the largest in history, and it's also been the most lucrative one for lawyers and consultants.
In a twist of capitalistic irony, traders are betting that the very banks that are synonymous with the 2008 financial crisis might actually boost the stock and bond markets over the next two months.
Libya invested billions of oil dollars around the world, including over $360 million with now-defunct Lehman Brothers.
updated: Tue Sep 28 2010 14:32:00
CNN's Jim Boulden looks at an auction of art and other items that belonged to Lehman Brothers.
Artwork that used to adorn the walls and halls of Lehman Brothers' offices in London is expected to fetch £2 million ($3.1 million) when it goes up for auction Wednesday.
Most Americans oppose it, but the government's bailout of Wall Street appears in hindsight as a heroic rescue that kept the world economy from collapsing, says analyst Fareed Zakaria.
Accounting -- exciting? After a global financial crisis that hinged on the misvaluation of assets, it's a lot more interesting than it used to be, and even more interesting if you're running one of the Big Four accounting firms. Talk about juggling constituencies: Ernst & Young CEO James Turley must respond to newly skittish clients, to recession victims who think accountants failed at their job, and to regulators worldwide who are certain that accounting rules must be changed -- they're just not sure how.
Unsecured creditors of Lehman Brothers may have choked last week when Harvey Miller, the lead attorney on the bank's bankruptcy, told Congress that the final bill to unwind its sprawling claims would likely hit $2 billion and take two more years to settle. He also said some of those creditors might only collect twenty cents on the dollar for approved claims.
Ever since Lehman Brothers imploded and filed for the largest bankruptcy in history nearly two years ago, the firm's former chairman and CEO, Dick Fuld, has been a little on edge.
Poor John Kasich. When he made that fateful decision in January 2001, he was just doing what politicians have done since time immemorial: he was taking a cushy Wall Street job between a couple of public office gigs in order to pad the family pocketbook.
The financial crisis wiped out almost $7 trillion in stock market value in 2008. It destroyed iconic American companies like AIG, Bear Stearns, Lehman Brothers, and nearly broke GM, costing tens of thousands of workers their jobs. It pushed millions out of their homes. And that's just in the U.S. -- forget the fallout still raining down on Europe and the rest of the globe. So where are the jail terms, or at least the perp walks, for those who oversaw it all? Cue the crickets.
Lehman Brothers' bankruptcy estate filed suit against JPMorgan Chase Wednesday, alleging that the bank demanded billions of dollars more than it needed in the firm's final days contributing to Lehman's ultimate demise.
On Sept. 15, 2008, America woke up to its worst financial meltdown in generations.
Lorenzo New spent 15 years working in the mortgage industry, his last stint at a subsidiary of Lehman Brothers. By 2007 the business was changing, "and my blood pressure was through the roof," he says.
The first thing you learn when you start looking at Wall Street, which I've been doing for 40 years, is to never trust the salesmen. What they promise you isn't necessarily what you get. You need to use common sense, watch out for your own interests, and at least make an attempt to understand the fine print.
Facing criticism for failing to prevent the collapse of Lehman Brothers, the nation's top finance officials told lawmakers Tuesday that the largest bankruptcy in U.S. history highlights the need for more vigorous regulation of the financial markets.
Lehman Brothers operated a side business that allowed the defunct brokerage to transfer risky investments off its books in the years leading up to its collapse, according to a report published Tuesday.
The McGuffin in the highly readable, 2,000-page report on what went wrong at Lehman Brothers was a bit of accounting magic called Repo 105. The transaction was based on the repurchase agreement, or repo deal, a common practice where a bank uses a security it owns as collateral for a short-term cash loan.
A year and a half after Lehman Brothers' collapse, Senate Banking Committee Chairman Chris Dodd, D-Conn., is calling for a federal investigation into the "Lehman situation" and other companies that may have fudged their balance sheets, contributing to the financial crisis.
The battered financial services firm Lehman Brothers Holdings has submitted a proposal with the U.S. Bankruptcy Court in New York to resolve the biggest Chapter 11 filing in Wall Street history.
When Erin Callan talked, people listened.
Failings by Lehman Brothers executives and its auditor led to the bank collapse that unleashed the worst of the financial crisis, according to a report by a court-appointed investigator.
Unraveling the biggest-ever U.S. bankruptcy case isn't cheap.
The charity foundation of Li Ka-shing, Hong Kong's richest man, and Singapore's sovereign wealth fund said Tuesday they had invested $15 million in SecondMarket. You may not have heard of this fast-growing New York-based company, but it's created new exchanges where companies and investors can sell assets they might otherwise have had trouble unloading.
UK stocks broke through a significant barrier set down in the financial crisis as the market's key index rose above levels last seen before the September 2008 collapse of Lehman Brothers, the investment bank.
Lehman Brothers, the collapsed Wall Street investment bank, is hiring bankers and paying generous bonuses in London to stop employees defecting.
updated: Mon Dec 21 2009 11:41:00
CNN's Kevin Voigt and Andrew Stevens look back at the biggest business stories of the decade.
The new century did not begin on Jan. 1, 2000 -- it started on Sept. 15, 2008, when Lehman Brothers collapsed.
A year ago, investors ran screaming from Lehman Brothers' assets as the investment bank crumbled. On Sunday, they could barely squeeze in for an auction of the firm's art collection in Philadelphia. As morbid as it sounds, death sometimes creates value for the living.
The first batch of artworks from the collection that once filled the corridors of Lehman Brothers' offices will be hitting the auction block on November 1. And while the works by David Hockney, Roy Lichtenstein and Robert Rauschenberg may be small potatoes for museum curators, the collection provides the opportunity for aspiring patrons of the arts to pick up brand-name artists for under $2,000. Bankers looking for an elegant office decoration -- and one with a conversation-starting provenance -- should check out the catalogue at freemansauction.com.
Is irrational exuberance back in markets? Evidence and examples abound suggesting that it might be.
Journalism is often called the first draft of history. The credit crisis has presented an unusually large share of professional scribes a chance to make their marks for posterity.
One year after the collapse of banking stalwart Lehman Brothers, the administrator of its European business says the full impact on creditors may not be known until 2010.
updated: Tue Sep 15 2009 00:16:00
The Lehman Brothers collapse had a profound impact in London. CNN's Jim Boulden reports.
It was around 10 p.m., exactly one year ago today, and I was standing out in front of Lehman Brothers on 7th Avenue watching as the then fourth largest investment bank in the world melted down. As I took in the scene, Lehman employees carrying out boxes under the kleig lights, past the police cordons, some shouting out angrily to perplexed tourists who had no idea what was going on, it dawned on me that the world was going to change. (The last time I felt anything like that, by the way, was when I watched the World Trade Center collapse, seven years to the month earlier.)
The terrain of the financial world has changed since the collapse of Lehman Brothers.
updated: Mon Sep 14 2009 15:44:00
CNN's Eunice Yoon reports on the legacy of Lehman Brothers in Asia on the one year anniversary of its collapse.
Just one year ago, the world's financial sector was plunged into chaos and panic as Lehman Brothers -- one of the biggest investment banks -- collapsed. Consumers learned some hard lessons, including how to cope with substantial 401(k) losses.
The collapse of Lehman Brothers was "unfortunate" but spurred the global policy coordination that ultimately saved the financial system, former Bear Stearns chief executive officer Alan Schwartz said in his first interview since Bear's fall last year.
It's been 12 months since Lehman Brothers failed, setting off a chain reaction that came horrifyingly close to destroying the world's financial system.
As head of the global structured finance syndicate at Lehman Brothers (he was promoted to a different job in 2006), Kevin White created the kind of collateralized debt securities that fueled the financial bubble -- and still bedevil many bank balance sheets.
As government regulators switch from crisis-mode to rescue mode, many of the biggest and most successful bailout programs are well on their way to extinction. But there are plenty of others that are gaining momentum as the economy heads toward a recovery.
In "Candide," the philosopher Voltaire explained how the British once executed one of their own admirals who lost an important battle "pour encourager les autres" -- to encourage the others not to dare repeat such a public failure. At present, there has been nothing remotely like that level of accountability for the Wall Street executives who led their firms -- and nearly American capitalism -- into the financial abyss. Aside from losing a large percentage of their sizable fortunes, neither Jimmy Cayne of Bear Stearns nor Dick Fuld of Lehman Brothers has found himself anywhere near the stockade. In such previous scandals as Enron and WorldCom, top executives went to jail, but this situation is less clear-cut in part because Wall Street was just playing by the regulatory rules that it helped write.
"It takes two to make an accident.... I hate careless people." -- Jordan Baker, the shady golf pro in "The Great Gatsby"
They started with a trickle and now rise up into a formidable wave as the one-year anniversary approaches of the near-implosion of the world's financial system: the new tell-all books, breathlessly promising to tell us "what really happened."
Since it is chillingly clear that U.S. financial institutions have for a good while been regulated no more stringently than, say, demolition derby drivers, Washington has belatedly locked the garage door and begun to debate strict new rules. The blueprint at hand is President Obama's sweeping proposal in mid-June to revamp the responsibilities of government agencies and impose new regulations on the financial establishment. Nothing about this plan will fall easily into place: Too many government agencies will dig in their heels. Too many financial companies will battle every aspect of reform that threatens their bottom lines.
We're about to mark the second anniversary of the financial meltdown. But don't expect to see any clinking of champagne glasses, because except for a handful of prescient (or lucky) speculators, it's been a ghastly two years. The nightmare started June 12, 2007, when news broke that two Bear Stearns hedge funds speculating in mortgage-backed securities were melting down. That was the precursor to the panics and collapses that have led to a worldwide recession and the fall of mighty institutions like Bear, AIG, Lehman Brothers, and Royal Bank of Scotland.
The Securities and Exchange Commission has filed fraud charges against the operators of the Reserve Primary Fund for failing to provide important information to investors and trustees about the fund's exposure to Lehman Brothers.
Imagine you're running an expansion team and the New York Yankees run into major financial problems. Derek Jeter and A-Rod are suddenly available...and affordable. That's the position in the M&A world where Peter J. Solomon, the 70-year-old head of his own investment bank, finds himself today. Solomon left Lehman Brothers, where he was a vice chairman of the firm and co-chairman of investment banking, 20 years ago because he thought the existing business model on Wall Street was broken.
It is axiomatic that to solve a problem, one must first understand it. To that end, I have devoted my spare time in recent months to studying our financial crisis - unearthing its root causes, delving into its manifold consequences and pondering its far-reaching implications.
It's not easy going to a job interview when the first item people see listed in your "experience" column is a name synonymous with financial disaster. "One of the things I've discovered is that having Lehman on your resume is not a good thing," says Anthony Singh with a slight smile.
It wasn't Dick Fuld's fault. No, not at all. How could anyone stop a financial tsunami? That's the audacious argument posed by Harvey Miller, lead bankruptcy attorney for the firm Weil Gotshal and advocate extraordinaire in mounting the first vigorous public defense of Dick Fuld, the widely discredited former CEO of Lehman Brothers. Miller effectively tries to absolve Fuld, his client, of any and all blame for the demise of the 158-year-old investment bank.
Taxes aren't the only question facing Tim Geithner.
If the story of 2008 was the government's unprecedented multi-trillion dollar bailouts of the financial sector, then the credit market was the story behind the story.
The world changed forever on Sept. 15, 2008, the Monday Meltdown, a day that will live in the annals of finance alongside Black Tuesday, Oct. 29, 1929. We are still odds-on to avoid a depression like the one that followed Oct. 29, but the Monday Meltdown made one more likely, and has claimed trillions of dollars of wealth worldwide and triggered a global recession. Understanding the financial shock that occurred that day is vital to finding a way out of our current mess.
At around 1 p.m. Tuesday, the FSA signed off and Barclays announced it had bought much of Lehman's business in the U.S., subject to bankruptcy court approval, which was granted - on an extremely expedited basis - on Friday, September 19. "Lehman Brothers became a victim," Judge James Peck said in approving the deal. "In effect, the only true icon to fall in the tsunami that has befallen the credit markets. And it saddens me."
At close to midnight, Mark Shafir, Lehman's global head of M&A, and Mark Shapiro, the head of Lehman's restructuring practice, went to see Fuld in his 31st floor office. They told Fuld there was a way Barclays could buy Lehman's U.S. securities business out of bankruptcy, which would get Barclays what it really wanted and potentially save 10,000 jobs.
Back uptown, at Lehman, Fuld and McDade were making frantic calls to whoever would listen to their pleas for help, including Paulson, Cox and Geithner. "But it crystallized in the course of the afternoon that it didn't look like they were going to do anything for us," a senior Lehman official said, despite Fuld's belief after having dinner with Paulson in April that "we have huge brand with [T]reasury."
On Sunday morning, the executive group re-assembled at the Fed at nine o'clock. "Everything was ready to go on Sunday morning," one participant said. "People were happy with the term sheet, so there was a doable deal on the table." Steve Shafran, a senior advisor to Paulson and an ex-Goldman Sachs partner, told a group of Lehman Brothers executives at the Fed that morning, "It looks like we may have the outlines of a deal around the financing." After which, the Lehman bankers thought they had saved their firm.
With Bank of America out of the mix, the bankers at the New York Fed examined a proposal by Barclays, whereby the British bank would acquire all of Lehman except for the firm's commercial real-estate asset book, which had a face value of $40 billion (before writedowns).
Earlier in the week, Paulson had called Ken Lewis, the CEO of Bank of America, and asked him to take one for the team by looking seriously at buying Lehman. (Some people believe that Paulson also gave his former colleagues at Goldman Sachs an early peek at the Lehman books, too.) Representatives from Bank of America flew up from its corporate headquarters in Charlotte, North Carolina and met with Lehman bankers at the midtown offices of Sullivan & Cromwell, Lehman's legal advisors.
Henry Paulson, the Treasury secretary, and Christopher Cox, the chairman of the SEC, flew up from Washington on Friday for a 6 p.m. meeting with Geithner to discuss what the plan for the weekend would be. Meanwhile, Ben Bernanke, the chairman of the Federal Reserve, stayed in Washington to coordinate a response with the leaders of other central banks around the globe. Going into the weekend, there were two potential suitors for Lehman Brothers - Bank of America and London-based Barclays.
On the surface, this financial crisis seems pretty complicated. Wall Street firms made convoluted bets on exotic mortgage securities, and those bets failed for a complex set of reasons. But in fact, investment banks went under for reasons that were quite basic.
Lehman Brothers' epic collapse two months ago marked a stunning turning point in the financial markets from which Wall Street is still recovering.
If you visit Lehman Brothers' website today, more than a month after the investment bank's plunge into bankruptcy, you can still find the following words: "The effective management of risk is one of the core strengths that has made Lehman Brothers so successful."
Investors who wagered that Washington Mutual would somehow survive the latest market turmoil will have to pay far less than some had feared.
German investigators raided the Frankfurt offices of KFW bank Wednesday in an investigation into a payment of more than $400 million made in error to failed U.S. investment bank Lehman Brothers.
Robert Diamond looks wiped. It's just after noon in London, and the president of Barclays - the newest power broker on Wall Street - is trying to snatch a few moments of calm. He ignores the gigantic TV suspended above his desk with its scrolling news of financial doom. European markets have continued to fall, despite an $87 billion British government financial bailout and a concerted round of interest rate cuts by central banks.
Former Lehman Brothers CEO Richard Fuld has been subpoenaed in connection with three grand jury probes into the investment bank's bankruptcy, a source with direct knowledge of the bankruptcy filing told CNN Friday.
One important method of short-term lending remained under fire last week, but there were signs of hope for it.
Privately scoffing at the U.S., European governments move to take partial control of their banks -- in spite of the spotty record of state intervention
As the economic downturn takes out Wall Street's power brokers, it may also collapse the charities depending on their largesse
September was arguably the worst month in hedge fund history, as unprecedented volatility in the capital markets forced once-mighty investment managers to book losses that had been thought unimaginable.
Barclays PLC will cut about 3,000 jobs in the aftermath of its purchase of bankrupt Lehman Brothers' North American investment banking and capital markets businesses, Fortune has learned.
After coordinated interest-rate cuts by central bankers and approval of a $700 billion rescue plan did little to unlock credit markets, Treasury officials are now discussing whether it's time for the government to take a direct ownership stake in the banking system.
Leverage, the menace that helped bring down some of the biggest names on Wall Street, is now threatening the health of big banks across the Atlantic.
David Einhorn should be celebrating one of the best months of his career. Two companies whose stock he bet big against - Lehman Brothers and Allied Capital - suffered grave blows, with Lehman filing for bankruptcy and Allied shares plunging 60%.
After much ado, the government appears ready to toss a lifeline to Wall Street. But with policymakers frantically battling to keep the economy out of a deep slump, it won't be the only one needed.
When Erin Callan, Lehman Brothers' onetime golden girl, left the firm in July, it was a tumultuous end to what had been a stellar 13-year run. She'd risen from tax lawyer to investment banker to a six-month stint as CFO - and was then thrown under the bus by her mentor, CEO Dick Fuld, as Lehman's share price tanked and rumors swirled about the firm's imminent demise.
As some of the world's largest banks teetered on financial demise, college seniors and recent alums had more on their minds than what it meant for their financial aid and student loans.
This story was written by CNNMoney.com writers Tami Luhby and David Ellis and Fortune.com writers Roddy Boyd and Colin Barr.
Treasury prices rallied sharply Monday after Lehman Brothers announced it will file for bankruptcy, sending a jolt of insecurity through Wall Street. The dollar gained ground against the euro.
Wall Street was a vastly different world Monday from what it looked like just days earlier, following one of the most harrowing days in the history of U.S. financial industry.
Lehman Brothers employees face the bleakest employment conditions in recent Wall Street history, and experts say there will likely be more painful financial sector job losses to come.
Rumor has it that Lehman Brothers CEO Dick Fuld recently wanted to turn off the firm's signature Jumbotron, the giant panels that flash the Lehman name day and night at its headquarters in New York's theater district.
The U.S. financial crisis has pushed Fed chief Ben Bernanke off the front page lately, but he may soon return with a vengeance.
Despite fears, the best advice right now is to do nothing
Henry Paulson and Ben Bernanke have saved us, for now, from a market meltdown - but at the cost of allowing the folks who caused the current crisis to keep ducking reality.
Far from stabilizing the financial system, the federal bailout barrage appears to have left investors shell-shocked.
A witch hunt has started for the investors who bet that stocks would go down. Did they cause the fall of Lehman and Merrill?
Central banks around the world are pumping billions of dollars into money markets in a coordinated bid to calm global financial upheaval.
Asian markets on Thursday followed the slump of major U.S. stocks, as an emergency loan to one of the world's biggest insurers stoked fears about the health of financial markets.
For years the financial markets roared along as if there were nothing to fear. Now it's payback time -- and all of us will be feeling the pain
Stocks plummeted Wednesday, with the Dow industrials falling 449 points in its second worst session of the year, as the government's emergency rescue of AIG amplified fears about the stability of financial markets.
Stocks tumbled Wednesday morning, as the government's rescue of AIG and Barclays' purchase of some of bankrupt Lehman's operations underscored the ongoing turmoil in financial markets.
If the death of Lehman Brothers upset the financial world, a collapse at AIG would have turned the credit markets upside down.
World stock markets were in decline again Tuesday, a day after the collapse of one of the largest investment banks in the U.S. contributed to the worst day on Wall Street in seven years.
updated: Tue Sep 16 2008 18:33:00
American International Group's shares tumbled as they scrambled to raise as much as $75 billion to stay afloat.
Stocks rallied Tuesday as investors focused on the positive implications for the economy in the Federal Reserve's decision to hold interest rates steady, and on diminishing fears about AIG's solvency.
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