Boom to Bust: The Lehman Brothers Story in Headlines

To honor the second anniversary of the historic Lehman Brothers bankruptcy, The Observer, has culled headlines from the past decade to track the rise and fall of what was once the fourth-largest firm on Wall Street.

Lean and Mean: “Lehman Brothers: Who Needs to Be Big?BusinessWeek, July 16, 2001.

Instead of trying to turn Lehman into a behemoth, Fuld, 55, has stuck to making it the nimblest and most cost-efficient operator on Wall Street. And he’s been doing so since Lehman–then worth $1.5 billion–was spun off from American Express Co.

Expansion: “Lehman Brothers Buys Wall St. Rival.” The New York Times, July 18, 2000.

The United States investment bank Lehman Brothers Holdings said yesterday that it had bought the private client business of a smaller Wall Street rival, SG Cowen, to expand its brokerage services to wealthy Americans.

9/11 Aftermath: “A NATION CHALLENGED: WALL STREET; Financial Firms Are Scattering Operations.” The New York Times, Sept. 21, 2001.

”I absolutely believe that there will be a central financial district in New York and we will be in it,” said Jeffrey Vanderbeek, a managing director of Lehman Brothers. But, like any good trader, he hedged that position, saying that where Wall Street firms ultimately wind up will depend ”on what kind of deals can be cut.”

Moving to Midtown: “Faces in the News.” Forbes. Oct. 9, 2001.

Lehman Brothers has agreed to buy a one-million-square-foot, 32-story office tower in Times Square from Morgan Stanley. … Richard Fuld Jr., chairman and chief executive of Lehman, said, “This agreement reaffirms our commitment to New York and is a win-win-win solution to a difficult office space problem facing both of our firms and the city.”

Prepared for Pain: “Banking & Securities: Still Tightening Those Belts.” BusinessWeek, Jan. 14, 2002.

Says Richard S. Fuld Jr., chairman of Lehman Brothers Inc.: “A lot of the world is calling for the beginning of the next bull market. I believe that, but I’m not managing the company to that. I believe there could be some more pain.”

Buying Neuberger: “Lehman to Buy Neuberger for $2.6B.” CNN/Money, July 22, 2003.

In a highly anticipated deal that will increase its offerings to wealthy individuals, Wall Street brokerage firm Lehman Brothers confirmed Tuesday it will buy money manager Neuberger Berman for $2.6 billion in cash and stock.

Wall Street’s Revival: “Lehman Cheers Wall Street With Strong Results.” Telegraph, March 17, 2004.

Lehman’s strong showing lately is seen as vindicating the strategy of chief executive Richard Fuld, who has moved the business away from its reliance on bond sales.

However, the bank is fighting a belief among some analysts that it cannot continue to grow at this pace.

Record Profit: “Lehman Brothers Reports Record Revenues and Net Income for Fiscal 2004.” Press release, Dec. 15, 2004.

Fuld: “Both our reputation as a trusted advisor to our clients and our momentum as a franchise have never been stronger.”

Record Profit: “Lehman Brothers Reports Record Revenues, Net Income and Earnings Per Share for Fiscal 2005.” Press release, Dec. 13, 2005.

Fuld: “Reaching this new level of performance is a testament to our commitment to deliver the Firm’s full platform to our clients worldwide and provide best-in-class total returns to our shareholders.

Huge Bonuses: “Bonus Bonanza as Bankers Strike Gold.” The Times, Dec. 18, 2005.

Richard Fuld, Lehman Brothers’ chairman and chief executive, received a $14.9m stock bonus.

Giant, Ill-Fated Contract: “Lehman’s Fuld to Get $188 Million Over Next 10 Years.” Bloomberg, Dec. 6, 2006.

Stumbling on Subprime: “Lehman Profit Falls on Subprime, but Still Beats Estimates.” The New York Times, Nov. 13, 2007.

Fuld: “Despite what continues to be a difficult operating environment, the firm’s results for the quarter highlight our ability to perform across market cycles and deliver value to our shareholders.”

Bigger Bonuses: “Lehman’s 2007 Bonus Pool Rises Almost 10% on Higher Revenue.” Bloomberg, Dec. 13, 2007.

“There were many divisions that made a lot of money and they made a lot of money all year,” said Jeanne Branthover, managing director of Boyden World Corp., an executive recruiter in New York.  “These firms have to keep their talent and they have to do it by paying.”

Top Execs Ousted: “Earthquake at Lehman.” Portfolio, June 12, 2008.

[T]his morning, Lehman Brothers’ chief executive Richard Fuld announced that chief operating officer Joseph Gregory and chief financial officer Erin Callan would be removed from their posts. … Lehman Brothers shares have plummeted more than 60 percent since the start of this year, as investors have questioned the firm’s valuation metrics and lost confidence in its ability to survive as an independent company in this post-Bear world.

Not Dead Yet: “CEO Fuld Confident After Lehman Cuts Mortgage Assets.” The Boston Globe, June 17, 2008.

Bankrupt: “Lehman to File for Bankrutpcy After Suitors Drop Out.” Bloomberg, Sept. 15, 2008.

Not My Fault: “Richard Fuld Tells Hearing That He Takes No Responsibility for Collapse.” The Times. Oct. 7, 2008.

Mr Fuld, who declared his firm bankrupt last month, blamed media reports, based on “rumours, speculation, misunderstandings and factual errors” for prompting a loss of confidence that ultimately sank the company.

Boom to Bust: The Lehman Brothers Story in Headlines