Did Lehman Bros’ Board of Directors Advise Firm’s Management to Take Action?

(NewsVisual, powered by IntellectSpace) -- In an effort to shore up its financial stability in the wake of the fallout from the subprime mortgage crises, Lehman Brothers Holdings Inc (NYSE:LEH), the country’s fourth-largest investment-banking firm, sold $3 billion worth of preferred shares of its stock, The New York Times reported.

The recent collapse of The Bear Stearns Companies Inc (NYSE:BSC) has fed rumors that Lehman Brothers could be the next big firm to bite the dust.

Since July, the share value of Lehman’s stock lost 42 percent of its value, The Times said.

The rumors themselves, regardless of whether they were true or not, could have impelled Lehman’s Board of Directors to counsel the firm’s Senior Executives to take decisive action in order to restore investor confidence.

“Regulators like Christopher Cox, Chairman of the Securities and Exchange Commission, attributed troubles at Bear to a lack of confidence, not capital, leaving open the possibility that other banks could fall prey to a similar crisis of confidence,” The Times article reported.

It seems likely Lehman’s Directors share Cox’s interpretation of the risks associated with investor anxiety.  But investors will also want to know if the decision-makers possess sound judgment.

Lehman Brothers Board Creates Valuable Industry Network

With Lehman Brothers posting less than expected profit losses from the third-quarter, the potentially bad news turned into a positive note today as Lehman Brothers stock rose over 4%(see article from DealBook). We created a two-degree IntellectSpace Knowledge Map of Lehman Brothers’ Board of Directors to get a better idea of how its corporate network has a reach into multiple industries.