On September 15, 2008, Lehman Brothers went bankrupt, victims of the subprime crisis and excessive risk-taking. Exactly one year after the scandal, former employees reflect on the fall and its consequences.
One year ago exactly, they had just learned the news. Lehman Brothers employees were packing and exiting the world headquarters in New York with boxes. That day, thousands of bankers lost their jobs and, most importantly, the failure of one of the giants of Wall Street was about to freeze the worldwide financial system and spark the biggest crisis since 1929.
That day is long forgotten for Alison, a former Lehman employee in human resources. One year later, she is far away from Wall Street... and is now the owner of a children's store in New York. The transition was complete in a matter of weeks as she had started to prepare her future as soon as she heard the first rumours about Lehman's collapse. After 12 years in banking, the MBA graduate does not regret the career change.
But not all former Lehman employees are so detached. Larry McDonald has chosen a very different path. A former trader, he is publishing the first tell-all book from a former insider entitled "A colossal failure of common sense".
"I really want to expose the few who hurt so many," he says. "All the problems emanate from one of the most mysterious places on Wall Street - that 31st executive suite at Lehman Brothers. That should never have had happened."
Richard Fuld was a powerful boss at Lehman and is someone Larry MacDonald singles out in his book. "People who were trying to stop the madness and who wanted us out of the subprimes in 2006....one by one by one, these people were silenced. At Lehman Brothers you kept your head down, you did your job or you lost both," said Fuld.
Fuld is busy trying to salvage his reputation. But most other former executives from Lehman, as well as most traders, have found a job on Wall Street, a quick recovery that worries some experts.
Economist and author of "A demon of our own design: markets, hedge funds and the perils of financial innovation", Richard Bookstaber sees the money made by Goldman as worrying.
"We know Goldman increased its risk posture and profits from it. And that’s a bad sign because other firms will feel that they have to follow suit." The next Lehman is already in the making...
Date created : 2009-09-14