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Boom Bust and Blame

Crisis A-Z


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Lehman Brothers:
Formerly one of the largest financial services firms in the world, Lehman Brothers was forced to declare bankruptcy in 2008. Before then, the firm dealt with investment banking and management, private equity, private banking, and research and trading. As a global company, Lehman Brothers had offices located in different countries with its main headquarters in New York City, London, and Tokyo.

Lehman Brothers' financial problems seemed clear in August 2007 when they had to close BNC Mortgage, its subprime lender. A year later, humbled by the ongoing subprime mortgage crisis, Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15. The bankruptcy is considered the largest in U.S. history and it caused unprecedented chaos in Wall Street with Lehman's shares dropping over 90 percent and the Dow Jones closing almost at 500 points on that day. A day after the bankruptcy announcement, British Bank Barclays Plc offered $1.75 billion for most of Lehman's North America operations. The transaction was approved on September 20. Nomura Holdings, a top brokerage firm in Japan, bought the Asian division of Lehman for $225 million.

The origin of Lehman Brothers can be traced back to 1850, when Henry Lehman and his brothers, Emanuel and Mayer, created a trading company through cotton, which was one of the most important commodities at the time. After being part of the New York Cotton Exchange and later of the Coffee Exchange, Lehman Brothers finally joined the New York Stock Exchange in 1887. By 1975, Lehman Brothers was the fourth-largest investment bank after CEO Pete Peterson acquired Kuhn, Loeb & Co. In 1994, after it spun off from American Express, Lehman Brothers Kuhn Loeb had an initial public offering as Lehman Brothers Holdings, Inc. and picked up speed after acquiring the private service business from Cowen & Co and Neuberger Berman.

Lewis, Ken:
Current Chief Executive Officer and President of Bank of America. He also served as Chairman of the Board, but was ousted by shareholders on April 29, 2009. He has been CEO of the bank since April 2001, after Hugh McColl retired from the position. Born in April 9, 1947 in Meridian, Mississippi, Lewis attended Georgia State University and earned a bachelor's degree in finance. He also attended Stanford University, where he completed the Executive Program.

Lewis started his banking career in Charlotte in 1969 as a credit analyst for North Carolina National Bank, which is the predecessor to NationsBank and later Bank of America. When the firm became NationsBank, Lewis headed both the international and domestic operations of the bank during his tenure as President from 1993 to 1998. He became the bank's COO in 1999 and stayed in that position until April 2001, when he became CEO. He eventually also assumed the position of President of Bank of America on July 1, 2004.

Liddy, Ed:
Current Chief Executive Officer of American International Group (AIG). He has been at the helm of the insurance company since September 2008, after replacing Robert Willumstand. Before joining AIG, Liddy was the former Chairman, President and CEO of Allstate.

Liddy was born on January 28, 1946 in New Brunswick, New Jersey. He attended The Catholic University of America, where he earned a bachelor's degree in 1968. He went on to earn a MBA from George Washington University in 1972.

He lives with his wife, Marcia, and they have three children.

Loan-to-value ratio:
A percentage expression of the relationship between the money borrowed to buy a real state property and the appraised value of the property. Often referred to as LTV, the loan-to-value ratio is a very important determinant on how much someone can borrow to buy real state.

Lockhart, James:
Director and Chairman of the Federal Housing Finance Agency since June 2006, after he was nominated by President George W. Bush. He also assumed responsibility for the regulation of Freddie Mac and Fannie Mae after the Housing and Economic Recovery Act was signed on July 30, 2008.

Lockhart was born in Connecticut and attended Yale University, where he earned a bachelor's degree. He then obtained a Masters from Harvard Graduate School of Business Administration.

Lockhart is married and has two children.

Logue, Ronald:
Current Chief Executive Officer and Chairman of the Board for State Street Corporation. He has been at the position since 2004 and has been part of the company since 1990. He has also been COO of the company and its President.

Born in Boston, Logue attended Boston College, where he earned Bachelor of Science and Master of Business Administration degrees.