Lehman Brothers

Lehman Brothers was a major U.S.

Lehman Brothers was a major U.S. investment bank founded in the 19th century in Montgomery, Alabama, and later headquartered in New York City. It became one of the largest investment banking firms in the United States before filing for Chapter 11 bankruptcy on September 15, 2008, during the global financial crisis. Its collapse is widely associated with exposure to subprime mortgages and other illiquid assets.

History

Lehman Brothers originated in Montgomery, Alabama, where Henry Lehman opened a store in the 1840s. The business began as a small dry-goods operation serving cotton farmers before Henry’s brothers, Emanuel and Mayer, joined him; the business evolved into cotton brokerage and eventually investment banking.

Growth and prominence

By the early 20th century, Lehman Brothers had grown into a major investment bank with broad financial advisory and securities operations. The firm developed a reputation as one of the leading Wall Street institutions and a significant player in global financial services.

Collapse in 2008

In the years before its failure, Lehman Brothers increased its exposure to derivatives and subprime mortgage-related assets. Mounting losses, falling asset values, and a lack of confidence among investors and counterparties led to the firm filing for Chapter 11 bankruptcy protection on September 15, 2008.

Legacy

Lehman Brothers' failure intensified the 2008 financial crisis and became a symbol of systemic risk in global finance. The collapse influenced later banking regulation and public debate about financial stability, and its North American businesses were acquired by Barclays.