Publications
Publications
- October 2011 (Revised December 2013)
- HBS Case Collection
Lehman Brothers and Repo 105
By: Anette Mikes, Gwen Yu and Dominique Hamel
Abstract
The collapse of Lehman Brothers in 2008 was the largest bankruptcy in US history. The case examines the economics of the off-balance sheet transactions Lehman undertook prior to the collapse, and highlights the corporate governance challenges in situations where firms face capital market pressure and market downturns. In particular, the case examines the financial accounting, auditing and internal management control practices around the Repo 105 transactions, which had a significant effect on the leverage position of the company. Based on the findings of the bankruptcy examiner's report, the case focuses on the role that management, external auditors, and the audit committee played in what amounted to a significant control failure.
Keywords
Accounting; Policy; Accounting Audits; Corporate Governance; Financial Instruments; Risk Management; Financial Services Industry
Citation
Mikes, Anette, Gwen Yu, and Dominique Hamel. "Lehman Brothers and Repo 105." Harvard Business School Case 112-050, October 2011. (Revised December 2013.)