Fraudstorytelling | Weekly filmtips | June 09, 2022
Title: The Collapse of Lehman Brothers – A Simple Overview
Producer: Company Man
Tagging: #Integrity, #Financialfraud, #Financialcrisis, #Accountingfraud, #Companymanagement, #Financialmarkets
Maybe you’ve heard of this bank, maybe you haven’t. However, the Lehman Brothers bank was well-known back then, particularly in 2008. Some countries are currently experiencing a housing bubble. Twenty years ago, Lehman Brothers played an active role in the US housing bubble. The financial crisis accelerated in 2008, when Lehman Brothers, a major US bank, declared bankruptcy. This bank was the fourth-largest investment bank in the United States at the time. Their assets and debts were nearly equal in weight. Having said that, this was one of the largest US bankruptcies in history. As a result, individuals, businesses, and governments across the world were at risk of losing their bank deposits. What Lehman Brothers were doing was entering into repurchase agreements with banks in the Cayman Islands. The company was selling toxic assets to the bank with an agreement to purchase them back later. However, they were marking these values as sales. Typically, these would be listed as loans to the company, making Lehman’s business appear to be tens of billions of dollars healthier than it actually was. Lehman Brothers denied knowing about this, and the bankruptcy examiner did not go so far as to call it fraud. However, misappropriation of funds is classified as negligence, which is not a crime and thus not punishable by criminal or civil charges. If you want to learn more about the Lehman Brothers, including how the bank got established and other details behind this story, we recommend watching this video by Company Man.
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