Lehman Brothers

DEFINITION of 'Lehman Brothers'

A firm that was once considered one of the major players in the global banking and financial services industries, but declared bankruptcy on September 15, 2008, after a catastrophic collapse caused by a mix of subprime mortgage exposure as well as negative rumors and alleged short selling in the market. The fall of Lehman Brothers marked the beginning of the public's awareness of the forthcoming credit crisis and recession of the late 2000s.

BREAKING DOWN 'Lehman Brothers'

The bankruptcy of Lehman Brothers was, at the time, the largest bankruptcy filing in U.S. history. Although the stock market was in modest decline prior to these events, the Lehman bankruptcy, coupled with the earlier collapse of Bear Stearns, greatly eroded confidence and led to a precipitous declines across the major U.S. indexes in late September and early October 2008.

RELATED TERMS
  1. Lehman Formula

    A compensation formula developed by Lehman Brothers for investment ...
  2. Technical Bankruptcy

    The state of a company or person who has defaulted on a financial ...
  3. Quick-Rinse Bankruptcy

    A bankruptcy proceeding that is structured to move through legal ...
  4. IRS Publication 908

    A document published by the Internal Revenue Service (IRS) that ...
  5. The Great Recession

    The steep decline in economic activity during the late 2000s, ...
  6. Voluntary Bankruptcy

    A type of bankruptcy where an insolvent debtor brings the petition ...
Related Articles
  1. Economics

    Lehman Brothers: The Largest Bankruptcy Filing Ever

    Lehman Brothers survived several crises, but the collapse of the U.S. housing market brought the company to its knees.
  2. Credit & Loans

    Credit Crisis: Wall Street History

    By Brian PerryA historical understanding of Wall Street will provide a starting place for analyzing the credit crisis that changed the financial landscape forever. Therefore, this first chapter ...
  3. Active Trading Fundamentals

    The Fall Of The Market In The Fall Of 2008

    How did America's strong economy tumble so quickly? Find out here.
  4. Options & Futures

    Should You File For Bankruptcy?

    Find out how to determine whether this option will help or hurt your financial situation.
  5. Credit & Loans

    Bankruptcy

    Learn what happens when an individual or an organization files for bankruptcy.
  6. Stock Analysis

    Fuld Out Of The Fold

    It's time for Lehman Brothers CEO Richard Fuld to step aside. The Wall Street gods demand a sacrifice that a round of demotions won't satisfy.
  7. Credit & Loans

    Bankruptcy Consequences

    You've done the deed and are out from under your debts – or embarked on a repayment plan. What consequences can you expect and how long will recovery take?
  8. Credit & Loans

    Credit Crisis: Bird's Eye View

    By Brian PerryThe credit crisis of 2008 includes some key events. Let's take a look at the series of events that reshaped the global financial community and forever changed the investment landscape. ...
  9. Stock Analysis

    Scrutinizing The Bear Stearns Fallout

    Several burning questions were left in the wake of the Bear Stearns buyout. We examine the implications for the broader market.
  10. Options & Futures

    Bankruptcy Filing Changes That Could Affect You

    When the economy is down, more people file for bankruptcy. Make sure you know about the changes that have been made to this process.
RELATED FAQS
  1. What are the financial consequences of filing for bankruptcy?

    Learn about the various consequences, both positive and negative, that you can expect to result from your filing for bankruptcy. Read Answer >>
  2. What are the reasons that cause investment bankers to fail in their careers?

    Explore the main reason why investment bankers fail. Learn about the failures of investment firm CEOs Dick Fuld and James ... Read Answer >>
  3. How do I find a good personal bankruptcy lawyer?

    Read how to find a good personal bankruptcy lawyer, and learn how much you can expect to pay for services if you are considering ... Read Answer >>
  4. Will filing bankruptcy stop an eviction?

    Learn about how filing bankruptcy can affect an eviction process, and find out what recourse your landlord has if you file ... Read Answer >>
  5. When did the real estate bubble burst?

    Collapsing home prices from subprime mortgage defaults and risky investments on mortgage-backed securities burst the housing ... Read Answer >>
  6. What effect did the Bankruptcy Abuse Prevention and Consumer Protection Act of 2 ...

    Credit card companies and banks hate deadbeats who take from their bottom lines. They especially dislike the Chapter 7 bankruptcy ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center