Lehman Brothers Case Analysis Case Study

Lehman Brothers Case Analysis
A case analysis of the laws broken by the Lehman Brothers company.
# 152531 | 4,271 words | 3 sources | APA | 2013 | US
Published on Mar 12, 2013 in Business (Finance, Investment and Banking) , Law (General) , Accounting (Fraud)

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The paper discusses the sudden bankruptcy of Lehman Brothers and looks at how CEO Fuld broke the three major laws of the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002 and negligence. The paper explores in detail the legal aspects of this bankruptcy and also examines Lehman's ethical decision-making model. The paper points out that as Lehman's bankruptcy was one of the causes for the worldwide economic meltdown, there is a high interest from the public to prosecute responsible individuals, especially Richard Fuld. The paper also includes recommendations for minimizing the probability of another bankruptcy.

Part 1: Legal
Part 2: Ethical

From the Paper:

"On September 15, 2008, Lehman Brothers (Lehman) filed for bankruptcy and this action began a series of events. Government officials around the world took steps to calm the financial market since it was in an upheaval. Both Wall Street and government officials were uncertain about the causes of Lehman's demise as the confidence in the market eroded and credit markets froze. Just a short three months prior, in June 2008, Lehman's financial situation was healthy.
"Perhaps the key to understanding Lehman's demise rests with Mr. Richard Fuld, Chief Executive Officer (CEO) of Lehman Brothers. On October 5, 2008, during a Congressional panel hearing, Fuld stated that he was responsible for the bankruptcy of Lehman. Though Lehman's bankruptcy is one of the largest ever, did Lehman and its executive officers break any law? Were they just victims of the credit crunch? What was Lehman's financial business model? How can a financially stable company be bankrupted in just three short months? As Fuld said, "I am the one who ultimately signs off and I'm comfortable with our valuations at the end of our second quarter," then he said on the conference call, "We have always had a rigorous internal process" (Field, 2010)."

Sample of Sources Used:

  • Field, Abigail (2010, March 12). "The Lehman Bankruptcy Report is a Road Map for Criminal Charges." Retrieved from http://www.dailyfinance.com/story/investing/the-lehman-bankruptcy-report-is-a-road-map-for-criminal-charges/19396531/.
  • Gallu, Joshua & Scheer, David (2010, March 12). "Fuld 'Negligent' as Lehman Hid Leverage, Report Says." Retrieved from http://www.bloomberg.com/apps/news?pid=20601087&sid=aGeWL3bkusWQ
  • "Section 906: Corporate Responsibility for Financial Reports." In Securities Lawyer's Deskbook. Retrieved from http://www.law.uc.edu/CCL/SOact/sec906.html.

Cite this Case Study:

APA Format

Lehman Brothers Case Analysis (2013, March 12) Retrieved March 05, 2024, from https://www.academon.com/case-study/lehman-brothers-case-analysis-152531/

MLA Format

"Lehman Brothers Case Analysis" 12 March 2013. Web. 05 March. 2024. <https://www.academon.com/case-study/lehman-brothers-case-analysis-152531/>