Quick Read
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Joseph Gregory’s 6.1 million Lehman shares, built over 34 years, became nearly worthless when the firm filed bankruptcy in September 2008.
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Lehman stock collapsed from $58 to $0.20 in under a year, and in bankruptcy shareholders collect nothing until all creditors are paid first.
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When your job, paycheck, and retirement savings all ride on one employer, a single failure can erase all three simultaneously.
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As of January 31, 2008, Joseph M. Gregory owned 6,188,903 shares of Lehman Brothers, according to the firm’s 2008 proxy statement. The same proxy listed another 700,000 shares he could buy within 60 days of that date, as a separate line. By the proxy’s own count, his holdings came to 1.31% of Lehman’s outstanding stock.
On September 15, 2008, Lehman filed the largest bankruptcy in U.S. history, and its stock was left nearly worthless.
A Whole Career at One Firm
Lehman’s 2008 proxy lists 1974 as the year Gregory joined, which works out to a period of 34 years by 2008. Other sources give different numbers. Fox Business reported 30 years, and NBC said “more than two decades.” Gregory rose to president and chief operating officer. For comparison, the same proxy shows Chief Executive Richard Fuld, who joined in 1969, owning 10,851,590 shares.
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How Quickly the Floor Gave Way
Lehman’s stock lost 73% of its value in the first half of 2008. The firm warned ahead of time that it would post a second-quarter loss of nearly $3 billion. On June 12, 2008, a Form 8-K announced that Herbert H. McDade III had been named president and chief operating officer, replacing Gregory. The filing did not say what Gregory’s new role would be. NBC reported the shares at about $22.70 after a 4.4% one-day drop, in a week when they fell about 30%.
