LehmanBrothers

The Lehman Brothers are an example of negative ethical practices, which affects the current financial crises in the United States. From a business perspective this case will not only show how important ethics and morality are in running a business but also steps to be taken to deal with them on large scale. Anton Valukas, a court appointed bankruptcy examiner stated in a report that individuals who made questionable risky deals were praised as heroes and on the other hand anyone who questioned these ideas were ignored by executives. The Lehman Brother's knew they were manipulating the balance sheets and removed $50 billion of unwanted assets. They ignored basic regulatory rules which created financial danger. Fundamental rules are the way companies grow and expand. Their desire to make money at all cost was more essential than following basic ethical values.
The company turned a cold shoulder towards their illegal and unethical behavior, and in turn Lehman’s top management set a tone for the overall operation, and created a culture of corruption. The culture at Lehman Brothers was to take risks at all costs. This led to shady deals which ultimately lead to the company’s downfall. Repo 105 is a good example of how Lehman misused this device to get $50 billion of undesirable assets off its balance sheet at the end of the first and second quarter of 2008, rather than counting and selling those assets at a loss. They continued to take lots of risks which led them to lose a lot of money and their reputation. The collapse of Lehman Brothers is blamed on the executives who allowed misleading and fraudulent manipulation of financial transactions and documents. Anton Valukas stated in a report, “The Lehman executives and the firm’s auditor, Ernst & Young, were profoundly criticized for actions that led to the firm’s collapse". Valukas pointed out Lehman’s former Chief Executive Richard Fuld forced the company to file misleading periodic reports. Lehman used