Mayer Lehman Brothers' long history began with three brothers, immigrants from Germany, setting up a small shop in Alabama, selling groceries and dry goods to local cotton farmers. Their business soon evolved into cotton trading. Dick Fuld made a series of acquisitions, designed to lessen Lehman's dependence on fixed-income trading, and focus attention on mergers and acquisitions, investment banking and raising capital. He began the process of restructuring the company so that it consisted of three major operating units: investment banking, equities and fixed income. He refocused the company's activities on high-margin business such as mergers and acquisitions, bringing in experienced senior staff to manage the business. The description of the company's activities reflected both the move away from fixed income trading, and Fuld's ambitions for Lehman Brothers.

This chapter examines the regulation of the Big Five investment banks in the context of the changes which took place in the structure of banking after the repeal of the Gramm-Leach-Bliley Act 1999 (GLBA). It also examines the introduction of the European Union's Consolidated Supervision Directive in 2004. The Act did not 'repeal' the Glass-Steagall Act in its entirety, but only repealed sections 20 and 32, which prohibited member banks from affiliating with organizations dealing in securities. The Federal Reserve became the 'umbrella' supervisor for any Financial Holding Company owning a bank; under its 'streamlined supervision' remit, the Federal Reserve was limited in its day-to-day authority to oversee functionally regulated non-banking subsidiaries of the holding companies. Though the Securities and Exchange Commission had adequate tools and statutory backing for taking on the consolidated supervision of the Big Five investment banks, its inability to carry out effective supervision was revealed soon.

On 10 September 2008, Dick Fuld presented what would be the firm's last earnings report, announcing the loss of $3.9bn, the second quarterly loss that had increased from the previous quarter's loss of $2.8bn. It also released some plans and proposed actions, which included the increase in total stockholders' equity, spin-off of certain commercial real estate assets, and a potential deal with a Korean sovereign wealth fund. All of the proposed actions were no more than plans, as opposed to completed deals or agreements. Just two days after Mayer Lehman filed for Chapter 11, Barclays announced that it would acquire Lehman Brothers North American investment banking and capital markets operations and supporting infrastructure. That included Lehman Brothers' New York headquarters and two data centres, all for $1.75bn, a price which the New York Times described as a 'fire sale' and which was much less than Lehman expected.