Ethics Erosion in Capital Market: Lehman Brothers’ Case Study of Repo 105

Abstract

This paper synthesizes the details of the whole accounting misdeed using Repo-105 as an instrument in the Lehman Brothers' case. Roles and responsibilities of internal staffs and vendors have been discussed to access on a high level responsibility and the ownership assessment of this financial fiasco. The paper discusses in detail the notion of Business ethics in the context of financial intermediary using the concept of "Deontological Ethics" as a premise with a relevance to capital market and cost of reputation. The paper suggests improving the management culture and the independence of external bodies in these firms.