Seventeen years ago, on September 15, 2008, investment banking giant Lehman Brothers filed for Chapter 11 bankruptcy protection. This bank, founded in 1850, was one of the most respected financial institutions of the time. Further, this particular event triggered serious panic across global equity markets. It marked the largest bankruptcy in history, with more than $600 billion in assets.
The consequential immediate impact was severe, with over $10 billion in initial investor losses and a 4.4% plunge in the Dow Jones Industrial Average in a single day. It further deepened the fears of a worldwide economic meltdown.
The collapse sent shock waves through regulators, investors, and governments. It revealed deep flaws in risk management, regulatory oversight, and the interdependence of financial institutions. The collapse was followed by government bailouts and emergency policy intervention.
The Lehman Brothers’ collapse became a historic symbol of how unchecked risk management, improper due diligence, lack of regulatory oversight and leveraged balance sheet bring down even the most decorated and storied Wall Street firms.
Investors must always acknowledge and practice these five lessons while investing. Focus should be on respecting the fundamental rules of wealth accumulation to build a generational fortune.
Disclaimer: This article is intended solely for educational purposes and should not be construed as financial advice. Investments are subject to risks, and professional guidance is recommended before making decisions.
