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. Prepackaged Bankruptcy

    A plan for financial reorganization that a company prepares in ...
  6. Lehman Brothers Mortgage-Backed ...

    An index made up of mortgage-backed securities that is used for ...
Related Articles
  1. Personal Finance

    Case Study: The Collapse of Lehman Brothers

    Lehman Brothers survived many financial crises in its long history. Find out what finally drove it to bankruptcy.
  2. 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.
  3. Economics

    A Comparison Between a Default and a Collapse

    Is the Greek default similar to the Lehman Brothers collapse?
  4. 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 ...
  5. Budgeting

    Avoiding Bankruptcy

    Anyone who spends more than they earn will be facing bankruptcy in no time, but there are some other ways to go flat broke.
  6. Options & Futures

    Should You File For Bankruptcy?

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

    Bankruptcy

    Learn what happens when an individual or an organization files for bankruptcy.
  8. Personal Finance

    How To Find A Job With Poor Credit?

    It's not legal for an employer to refuse to hire you for having bad credit, but he doesn't have to say that you weren't hired because of your bankruptcy.
  9. Bonds & Fixed Income

    Taking Advantage Of Corporate Decline

    A bankrupt company can provide great opportunities for savvy investors.
  10. Personal Finance

    7 Bankrupt Companies That Came Back

    Bankruptcy is often the end of a company – until it isn't.
RELATED FAQS
  1. What are examples of inherent risk?

    Explore two famous examples of inherent risk with the collapse and ultimate bankruptcy of Lehman Brothers and the downfall ... Read Answer >>
  2. Why do bankers incur risk when underwriting?

    Learn why investment banks take on risk when underwriting. Explore examples of investment banks that have underwritten assets ... Read Answer >>
  3. 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 >>
  4. How will bankruptcy affect my ability to get credit in the future?

    Learn how filing bankruptcy affects your ability to obtain credit in the future, and find out how long a bankruptcy stays ... Read Answer >>
  5. 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 >>
  6. How do I get information about my bankruptcy case?

    Learn about different places to search when seeking information about an individual's bankruptcy. Learn about Public Access ... Read Answer >>
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  4. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  5. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  6. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
Trading Center