How corporate culture killed a bank

How corporate culture killed a bank
Former Lehman Brother’s president Joseph Gregory, with his second wife, Niki

Lehman Brothers was the 158-year-old financial services firm that died of bankruptcy in 2008. It was the largest bankrupcy in U.S. history.

Vicky Ward’s book, The Devil’s Casino, says the roots of the problem were found in Lehman’s corporate culture. She examines four Lehman employees – close friends who wanted to be the good guys of finance – and how obedience was enforced and backstabbing politics became the rule.

"I think the book is really a kind of morality-tale. It shows us how the best intentions go astray and how the will to acquire, to succeed, is in the end a force of human nature and is rarely tempered and overcome. I think the book shows that no matter what the "rules" or "regulations" are on the Street, clever or hungry bankers have always historically found a way around them. So I think that we will see history repeated – probably not tomorrow. But eventually – yes. Doesn’t history always get repeated? Isn’t that the irony of humanity?"

Book review from The New York Times>>

The Devil’s Casino: Friendship, Betrayal, and the High-Stakes Games Played Inside Lehman Brothers by Vicky Ward>>

You can read an excerpt at Vanity Fair where she looks at Lehman from the wive’s perspective. It sounds as petty and mean-spirited as a wealthy high school. Well, no, that’s not quite right. These people have money and power through their husbands. The politics and social maneuvering are more like the dukes and earls (or the female dukes and earls – would they be the countesses and ladies?) suffocated in intrigue inside a King’s court, handling everything to do with family while their husbands took care of business.

Karin Jack knew what was required of her as her spouse rose in the company. "I mean, Brad didn’t do one single thing for 20 years that wasn’t Lehman Brothers," she recalls. "Not a postcard, nor a Christmas present, nor a phone call to his family. I did everything, unless it had a Lehman stamp on it. As a Lehman wife, you raised your kids by yourself. You had your babies by yourself in the hospital. And then you were supposed to be happy and pretty and smiling when there was an event, and you really would have liked to strangle somebody," she explains.

Lehman’s Desperate Housewives, at Vanity Fair>>

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