The cultural shift that engulfed Lehman Brothers, typified by the leadership of former CEO Dick Fuld, was the start of a road that led to the company's demise, the author of a book on the history of the investment bank told CNBC Wednesday.
Click here to watch the full interview with author Peter Chapman
In the 1990s Dick Fuld era, Lehman shifted away from its "almost merchant banking style" of business, taking very calculated risk, to the new way of Wall Street, Peter Chapman, author of "The Last of the Imperious Rich," said.
"Traders took over from bankers, long term became short term and that, I think, was the germ of the problem in the end," Chapman said.
But the failure of Lehman also had something to do with bad timing, he added.
Following the collapse of Bear Stearns, it "was the smallest of the remaining investment banks, all of whom were grossly exposed on subprime and collateralized debt obligations."
"Lehman was unfortunate for being the small one and Lehman was the fall guy that went in the end, I think, mainly for ideological reasons."
As for the overall crisis, investment banks were fooling themselves that they were hedged when actually they all "had an awful lot of eggs in the same basket … and it risked blowing the system."
The risk "just blew up in everybody's faces," Chapman said.