Which New York investment bank's 2008 bankruptcy became the largest in U.S. history?

Lehman Brothers became the largest U.S. bankruptcy when it filed for Chapter 11 protection on September 15, 2008.

The investment bank had built a large business in mortgage-related securities and real-estate financing. As U.S. house prices fell and mortgage defaults increased, the value of many assets on its balance sheet became difficult to establish. Investors and counterparties lost confidence, while efforts to find a buyer failed.

Lehman’s collapse intensified the global financial crisis because the firm was deeply connected to banks, insurers, and financial markets worldwide. The failure contributed to a severe freezing of credit and was followed by emergency government and central-bank actions in several countries.

Lehman Brothers is sometimes confused with Bear Stearns, another major investment bank rescued earlier in 2008. Bear Stearns was sold to JPMorgan Chase with government assistance in March; Lehman was allowed to fail in September. The bankruptcy remains a central case study in systemic financial risk.