Episode Details

In this episode, we trace the 158-year history of Lehman Brothers, from its humble beginnings to the bankruptcy that shook the world. We explore how Henry, Emanuel, and Mayer Lehman founded the firm in 1850 as a dry-goods store in Alabama, eventually building their initial fortune on the cotton trade and the products of plantation slavery.

We follow the firm's move to New York City, where it evolved into a financial powerhouse that survived the Civil War and the Great Depression. We also discuss the internal power struggles of the 1980s that ousted CEO Pete Peterson and the aggressive era of CEO Dick Fuld. Finally, we break down the causes of the largest bankruptcy in U.S. history, including the firm's disastrous exposure to the subprime mortgage crisis, the use of "cosmetic" accounting gimmicks to hide debts, and the chaotic final weekend in September 2008 that ended with the firm's liquidation.