When Lehman Brothers declared bankruptcy in 2008, the move precipitated a domino-like effect throughout the financial world. The mammoth financial services firm was, in essence, making high-risk credit decisions by violating one of the most basic banking credos: do not borrow short-term and lend out cash long-term (Wolff, 2011, internet). Decisions based on this philosophy became the norm of corporate culture at Lehman Brothers, a firm where top executives can be held as highly culpable in its ultimate demise.
Lehman Brothers' executives, such as CEO Richard S. Fuld, compensated themselves enormously even as the firm began to sink. For example, in congressional hearings, he defended his pay that rewarded him nearly $310 million over the course of seven years (Wolff, 2011, internet). During the same time, however, Fuld was responsible for semi-ethical accounting procedures that made Lehman Brothers look more profitable and creditworthy than it actually was. For instance, the company wrote off many of its losses in its subprime mortgage investment racket via a conduit that connected to a small company it owned called Hudson Castle (Wolff, 2011, internet). Fuld, as well as other top executives rewarded themselves handsomely even as they knowingly engaged in unethical accounting procedures. Later, after its bankruptcy ruling, Lehman Brothers would be forced to pay only 14 cents on the dollar to its creditors, passing the buck to American taxpayers (Wolff, 2011, internet).
There were a lot of unethical goings-on at Lehman Brothers at the beginning of the millennium. Most, if not all, of those unethical procedures became standard protocol at the giant firm. Moreover, a scapegoat is easy to find. Top executives never sacrificed their compensation packages even as the firm took a nosedive, initiating a global economic collapse. Ultimately, top executives at Lehman Brothers were not only suspects, but they were victims as well -- victims of their own greed.
References
Wolff, R. (12 Dec, 2011). Lehman Brothers: financially and morally bankrupt. The Guardian. Retrieved from http://www.theguardian.com/commentisfree/cifamerica/2011/dec/12/lehman-brothers- bankrupt
