1. Describe the situation at Lehman Brothers from an ethics perspective. What’s your opinion of what happened here?

2. What was the culture at Lehman Brothers like? How did this culture contribute to the company’s downfall?

3. What role did Lehman’s executives play in the company’s collapse? Were they being responsible and ethical? Discuss.

4. Could anything have been done differently at Lehman Brothers to prevent what happened? Explain.

5. After all the public uproar over Enron and then the passage of the Sarbanes-Oxley Act to protect shareholders, why do you think we still continue to see these types of situations? Is it unreasonable to expect that businesses can and should act ethically?

On September 15, 2008, financial services firm Lehman Brothers filed for bankruptcy with the U.S. Bankruptcy Court in the Southern District of New York.95 That action—the largest Chapter 11 filing in financial history—unleashed a “crisis of confidence that threw financial markets worldwide into turmoil, sparking the worst crisis since the Great Depression.” The fall of this Wall Street icon is, unfortunately, not a new one, as we’ve seen in the stories of Enron, WorldCom, and others. In a report released by bankruptcy court-appointed examiner Anton Valukas, Lehman executives and the firm’s auditor, Ernst & Young, were lambasted for actions that led to the firm’s collapse. He said, “Lehman repeatedly exceeded its own internal risk limits and controls, and a wide range of bad calls by its management led to the bank’s failure.” Let’s look behind the scenes at some of the issues.