The House Lehman Destroyed
Posted by Tiernan Ray
Now it can be told.
U.S Bankruptcy Judge James Peck today ruled Anton Valukas, of the law firm of Jenner & Block, assigned to investigate the 2008 collapse of Lehman Brothers, would be allowed to release his full report on what happened.
You can now download the whole thing in PDF format here.
Judge Peck, Reuters’s Emily Chasen notes, called the thing “as good as a bestseller,” and “one of the most extraordinary pieces of work I have ever encountered.”
From the executive summary on page 43, “Why Did Lehman Fail?”:
In 2006, Lehman adopted a more aggressive business strategy by expanding its investments in potentially highly profitable lines of business that also carried much more risk than Lehman’s traditional investment banking activities. Through the first half of 2007, Lehman focused on making “principal” investments – committing its own capital in commercial real estate (“CRE”), leveraged lending, and private equity-like investments. These investments were considerably riskier for Lehman than its other business lines because Lehman was acquiring potentially illiquid assets that it might be unable to sell in a downturn.
